Motilal Oswal's research report on Aditya Birla Lifestyle Brands
ABLBL reported a modest 4% YoY revenue growth (vs. 11% for Arvind Fashion) in 2QFY26, as strong 12% LTL retail growth was offset by the adverse impact from recent store rationalization and GST-related transition on wholesale primary sales. EBITDA rose 12% YoY to INR3.2b, with margins expanding 125bp to 15.5%, driven by higher gross margin. However, pre-Ind AS EBITDA for 1H was flat at INR2.5b, with ~15bp margin contraction due to higher lease rental costs.
Outlook
We ascribe a 12x Dec’27E EV/EBITDA multiple to the Lifestyle brands and a ~1.2x EV/Sales multiple to the Emerging brands. We maintain a Neutral stance with a revised TP of INR155 (implies ~23x Dec’27 pre-INDAS EV/EBITDA).
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