Buy Aditya Birla Fashion & Retail; target of Rs 385: Sharekhan

Sharekhan's research report on Aditya Birla Fashion & Retail

Aditya Birla Fashion & Retail Limited (ABFRL) registered mixed performance in Q1FY2025 with revenue growing by 7% y-o-y (2% growth excluding TCNS), while EBITDA margin expanded 131 bps y-o-y to 10.5% (beating estimates), leading to 23% y-o-y EBITDA growth. Pantaloons’ revenue grew 5% (LFL growth of 2%), while new businesses continued to drive growth in Q1. Management expects H2FY2025 to be better aided by the festive demand. Management expects Tasva and TMRW to continue to post losses, while TCNS is expected to become profitable in H2FY2025.

Outlook

The stock trades at 22x/17x its FY2025E/FY2026E EV/EBITDA, respectively. We maintain Buy on the stock with a revised SOTP-based PT of Rs. 385.