Motilal Oswal's research report on Aditya Birla Fashion and Retail
Aditya Birla Fashion and Retail (ABFRL)’s consolidated EBITDA grew 23% YoY (12% beat), led by the Lifestyle/ABLFL others/Pantaloons segments, which saw 50bp/11pp/470bp expansion in EBITDAM. Revenue growth was fueled by new businesses. The net loss widened to INR2.1b (vs. loss of INR1.6b YoY). The rationalization of loss-making stores and the discontinuation of unprofitable channels in Madura turned out to be positive. However, continued investments in new businesses (Tasva and TMRW) could put pressure on earnings for the next few quarters. We estimate a CAGR of 13%/21% in revenue/EBITDA over FY24-26E. Reiterate Neutral.
Outlook
We value ABFRL on the SOTP basis, assigning EV/EBITDA of 20x to ABLFL, 10x EV/EBITDA to Pantaloons, and EV/sales of 1x to other businesses of ABFRL (demerged) on FY26E. Hence, we reiterate our Neutral rating with a TP of INR340
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