Earnings Release: Here's Why Analysts Cut Their Go Fashion (India) Limited (NSE:GOCOLORS) Price Target To ₹1,295

It's been a sad week for Go Fashion (India) Limited (NSE:GOCOLORS), who've watched their investment drop 11% to ₹1,000 in the week since the company reported its annual result. Results overall were respectable, with statutory earnings of ₹15.32 per share roughly in line with what the analysts had forecast. Revenues of ₹7.8b came in 2.6% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Go Fashion (India) after the latest results.

View our latest analysis for Go Fashion (India)

After the latest results, the seven analysts covering Go Fashion (India) are now predicting revenues of ₹8.98b in 2025. If met, this would reflect a decent 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 29% to ₹19.74. In the lead-up to this report, the analysts had been modelling revenues of ₹9.34b and earnings per share (EPS) of ₹22.43 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The consensus price target fell 6.8% to ₹1,295, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Go Fashion (India) at ₹1,539 per share, while the most bearish prices it at ₹1,130. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Go Fashion (India)'s past performance and to peers in the same industry. It's pretty clear that there is an expectation that Go Fashion (India)'s revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 21% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Go Fashion (India).

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Go Fashion (India) analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Go Fashion (India)'s Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.