CIFAR improves Go Fashion’s credit rating
Go Fashion (India) said ICRA has upgraded the company’s long-term and short-term credit facility ratings.
The rating agency upgraded Go Fashion‘s long-term rating to ‘[ICRA] A’ of ‘[ICRA] A-‘. He also upgraded the company’s short-term rating to ‘[ICRA] A1’ of ‘[ICRA] A2+’.
ICRA said the ratings upgrade reflects the expected steady improvement in Go Fashion India’s (GFIL) performance over the medium term, supported by its strong position in the domestic women’s bottoms market.
In addition, GFIL has a sound financial profile, characterized by strong capitalization levels and liquidity position, further strengthened by the equity injection of Rs 125 crore achieved through the initial public offering (IPO) in November 2021.
After the pandemic-induced business disruptions in fiscal year 2021, GFIL’s business performance has improved in the current fiscal year, driven by its established brand and better demand conditions (recording growth in revenues of approximately 77% year-over-year in the 9 months of FY2022).
ICRA expects GFIL’s revenue to grow at a CAGR of 10% over the medium term, driven by steady demand and continued diversification measures with approximately 120 exclusive outlets (EBOs) proposed to be added each year over the next few years.
In addition, thanks to its stores’ operational efficiencies, better economies of scale and improved revenue contribution from the higher-margin EBO channel, operating margins recovered to around 30%. in fiscal 2022 and are expected to remain at similar levels over the next several years. tax.
The “stable” outlook reflects CIFAR’s view that GFIL’s performance over the coming quarters will continue to benefit from its established position in the market with healthy operating efficiencies, proposed diversification initiatives and strong levels of capitalization.
Go Fashion (India) retails women’s bottoms under its Go Colors brand. Products are sold domestically through its extensive pan-India retail network comprising of 476 EBOs and approximately 1,330 large format stores.
The company’s consolidated net profit increased by 33.4% to Rs 23.69 crore on a 46.6% increase in net sales to Rs 142 crore in Q3 FY22 compared to Q3 FY21.
The certificate lost 0.14% to end at Rs 996.00 on BSE on Friday.
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