Motilal Oswal initiated coverage with a Buy rating and a target of Rs 1,127, implying a 30% upside.
Motilal Oswal said GoColors is set to benefit from its leadership in the women’s bottom-wear segment and D2C model, with scope to expand beyond ~180 cities. It expects a 16% revenue CAGR over FY25–28E, led by 18% growth in EBO and online channels.
Despite a likely 130 bps dip in gross margin, operating leverage could drive EBITDA margin up by 135 bps to 18.2%. EBITDA and PAT are projected to grow at 19% and 20% CAGR, respectively, with cumulative OCF/FCFF of Rs 3.7 billion/Rs 2.5 billion.
