Go Fashion reported a 59% year-on-year decline in consolidated net profit to ₹9 crore for the second quarter of FY27, according to CNBC TV18. Revenue from operations also declined 3% to ₹217.6 crore, compared with ₹224 crore in the corresponding quarter last year. The company's earnings before interest, tax, depreciation and amortisation (EBITDA) fell 21% year-on-year to ₹53 crore, against ₹66.8 crore in Q2 FY26. EBITDA margin contracted to 24.2% from 29.8% a year ago. As per Anand Rathi's latest research report dated November 1, 2026, the company experienced a 461 basis points year-on-year decline in adjusted EBITDA margin to 25.7%, attributed to lower large-format store sales, raw material cost inflation, higher brand spending, and negative operating leverage. Motilal Oswal's latest report confirms that pre-Ind AS EBITDA (ex-one-offs) declined 40% YoY to ₹200 million in Q2, with margins contracting 570 basis points YoY to 9.2%, primarily due to raw material pressure and higher brand investments.
According to CNBC TV18, CEO Gautam Saraogi attributed the quarterly impact to a shift in the festive calendar that delayed large-store dispatches. With key festivals moving into the third quarter, bulk dispatches to large-format store (LFS) partners, which typically take place ahead of the festive season, shifted to October, affecting quarterly revenue. Saraogi noted that the company's exclusive brand outlet (EBO) channel continued to grow despite the change in festive timing, while same-store sales growth (SSSG) remained broadly flat at -0.2% compared to +0.2% in the first half. The company's retail area was up 3.3% in H1FY27 despite net closure of 65 stores, indicating successful conversion of small format stores to larger formats.
Go Fashion has implemented an aggressive store closure program, shutting 185 small format stores over FY25-H1FY27 and plans to convert the remaining 120-150 small stores (<300 sq. ft.) into large format stores (700+ sq. ft.) gradually over the medium-term. As per Anand Rathi's research report, the company expects H2FY27 to outperform H1FY27, driven by a slowdown in store closure from Q3FY27 onwards with only 15-20 store closures targeted. The management anticipates recovery in gross margin over the next two quarters, supported by calibrated price hikes. According to Motilal Oswal's analysis, the company maintains a debt-free balance sheet with ₹2.5 billion cash (~20% of market capitalization) to fund the larger-store transition strategy.
As reported by CNBC TV18, Go Fashion's gross margin stood at 60.8% during the quarter, with the company attributing the decline to higher raw material prices. Fabric costs rose due to the geopolitical situation, impacting operational margins. Saraogi indicated the company intends to pass on raw material inflation through calibrated pricing actions, which are expected to help restore gross margins progressively over the coming quarters. According to Anand Rathi's analysis, the company faced additional pressure from higher brand spending and negative operating leverage during the quarter. Motilal Oswal's report confirms that H1 EBITDA declined 25% YoY to ₹513 million, with margins down 380 basis points to 11.6%, primarily due to raw material pressure from fabric inflation.
Despite the weak quarterly performance, Motilal Oswal has upgraded Go Fashion India to BUY with a target price of ₹300, based on 10x FY28 pre-Ind AS EV/EBITDA valuation. The upgrade is based on expectations of turnaround in operations, strong balance sheet, and reasonable valuation. As per CNBC TV18, shares of Go Fashion (India) fell over 6% on Friday, October 30, following the earnings announcement. The company incurred an exceptional expense of ₹3.4 crore during the quarter, relating to the write-off of capital expenditure following store closures as part of its strategy to optimise its store network. At ~13x TTM pre-Ind AS EV/EBITDA, the stock already reflects near-term margin pressure, while the debt-free balance sheet with substantial cash reserves provides financial flexibility for the company's transformation strategy.