Neutral Aditya Birla Fashion and Retail; target of Rs 335: Motilal Oswal

Motilal Oswal recommended Neutral rating on Aditya Birla Fashion and Retail with a target price of Rs 335 in its research report dated November 10, 2024.

Broker Research

November 12, 2024 / 15:23 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Aditya Birla Fashion and Retail

Aditya Birla Fashion and Retail (ABFRL)’s consol. revenue grew 13% YoY,driven by TCNS consolidation and improvement in Lifestyle’s LTL growth. ABFRL’s EBITDA was up 12% YoY (4% beat) as improvement in Pantaloons’profitability was offset by ~300bp YoY margin contraction in Lifestyle. ABFRLposted a net loss of INR2.1b in 2Q (INR13.6b cumulative loss since 4QFY23). We lower our FY25-26 revenue estimate by 3%/6% on lower store additions,while our EBITDA estimates are broadly unchanged. We build in a CAGR of 10%/17% in revenue/EBITDA over FY24-27E. Webelieve our estimates of profitability improvement in newer segments areoptimistic. Delays in ramp-up in profitability could pose downside risks. We value ABFRL on the SOTP basis. We assign EV/EBITDA multiple of 15x to both ABLBL and Pantaloons businesses and EV/sales of 1x to other businesses ofABFRL (demerged) on Dec’26E. We reiterate our Neutral rating with a TP ofINR335.

Outlook

We value ABFRL on the SOTP basis. We assign EV/EBITDA multiple of 15x to bothABLBL and Pantaloons businesses and EV/sales of 1x to other businesses of ABFRL(demerged) on Dec’26E. We reiterate our Neutral rating with a TP of INR335.

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