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Anand Rathi Report
Go Fashion India Ltd.'s Q3 revenue was in line with our estimates, but the Ebitda margin was ~260 basis points above ARe, due to a better gross margin. A further decline in the inventory led to better cashflows, with pre-Ind AS operating cash flow of Rs 1,044 million (Rs 5 million in 9M FY23).
Cash reserves grew to ~Rs 2 billion (Rs 1.7 billion at end-H1). We lower our FY24e-26e revenue/Ebitda ~6.4%/7.1% on average, on the continued demand slowdown.
We are positive on Go Fashion as it maintains its growth trajectory with strong operational efficiencies.
We retain our 'Buy', at a 12-month target price of Rs 1,499, 22 times FY26e enterprise value/Ebitda (earlier Rs 1,607, 22 times FY26e enterprise value/Ebitda).
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