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Aditya Birla Fashion & Retail: Why we continue to remain cautious on the stock

New businesses would continue to drag profitability and margin pressures witnessed last fiscal are likely to sustain in FY24 also.

May 23, 2023 / 10:28 AM IST
Aditya Birla Fashion & Retail: Why we continue to remain cautious on the stock

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Highlights Results miss estimates Near-term pressure for core business Scaling up new businesses Profitability pressure to continue Aditya Birla Fashion & Retail’s (ABFRL; CMP: Rs 190; Market cap: Rs 18,013 crore) Q4FY23 results were lower than Street expectations. While revenue growth was strong, profitability declined sharply, with the company reporting a huge loss at the net level. While ABFRL would deliver a healthy top-line growth (led by network expansion of core business and scaling up of new businesses), profitability is likely to remain under pressure...

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