Sharekhan's research report on Aditya Birla Fashion & Retail
Aditya Birla Fashion & Retail Limited’s (ABFRL’s) Q2FY2025 numbers were muted with revenues rising 13% y-o-y (LFL growth of key brands remained muted), while EBITDA margin stood flat y-o-y at 9.9% and adjusted loss widened y-o-y to Rs. 230 crore. Management expects H2FY2025 to be better, aided by festive and wedding demand. Focus will stay on improved profitability across the established and new businesses. At H1FY2025-end, net debt stood at Rs. 3,759 crore. With pick up in retail sales in H2, management expects net debt to reduce by Rs. 400-500 crore in H2.
Outlook
Stock trades at 22x/18x/15x its FY25E/FY26E/FY27E EV/EBITDA, respectively. We maintain Buy with an unchanged SOTP-based PT of Rs. 385.
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