Aditya Birla Fashion shares fall nearly 7% after margins drag, brokerages have mixed opinions

Lifestyle Brands' revenue increased 5 percent year-on-year and Pantaloons's revenue increased 1 percent year-on-year on Q1FY24.

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26 Aug, 2025 12:21

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Aditya Birla Fashion and Retail Limited (ABFRL) shares fell 6.5% percent to Rs 196.50 at 11:17 am on August 7 after the apparel company’s margins fell 640 basis points year-on-year to Rs 11 percent in the April-to-June quarter. EBITDA margin was dragged down due to significant losses in the ethnic and TMRW segments.

Losses in the TMRW segment was between Rs 80 crore and Rs 100 crore, ABFRL’s management said in its Q1FY24 earnings conference call. Losses increased further on one-time launch expenses on the ‘Sabyasachi’ store in Mumbai.

Analysts views

ICICI Securities has downgraded the stock to a ‘hold’ rating and revised the target price to Rs 200. Target price before was Rs 210. The brokerage firm said that overall revenue grew 8 percent year-on-year, however performance in Pantaloons and Lifestyle brands has been unexciting.

Motilal Oswal has maintained a ‘neutral’ rating on the stock with a target price of Rs 190. Weak demand in the apparel industry along with heavy investments in new businesses could put pressure on ABFRL’s earnings over the next 4-6 quarters, the brokerage firm said.

Nuvama Institutional Equities has maintained a ‘buy’ rating on the stock and revised the target price to Rs 257. The target price before was Rs 253. The brokerage firm cut EBITDA estimates by 8 percent for FY24.

Segment-wise business

Lifestyle Brands’ revenue increased 5 percent year-on-year and Pantaloons's revenue increased 1 percent year-on-year in Q1FY24. ABFRL’s management said the slow growth in Pantaloons was due to high cotton prices. The innerwear and athleisure segment continues to be muted, the management said.

ABFRL reported a net loss of Rs 162 crore in the April-to-June quarter as compared to a profit of Rs 94 crore in the same period last year.

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