Buy Aditya Birla Fashion and Retail: target of Rs 255: Sharekhan
Sharekhan is bullish on Aditya Birla Fashion and Retail has recommended buy rating on the stock with a target price of Rs 255 in its research report dated May 28, 2021.
June 10, 2021 / 11:37 AM IST
Sharekhan's research report on Aditya Birla Fashion and Retail
Aditya Birla Fashion & Retail Limited’s (ABFRL) business recovered to ~100% in Q4FY2021. Lifestyle and Pantaloons recovered to 94%-95% each compared to pre-COVID levels. OPM improved by 580 bps to 14.4%. Despite disrupted FY2021 (revenue down by 41%), the company managed to reduce cost by Rs. 1,221 crore due to rental negotiations and other cost savings. Some benefits are likely to continue in FY2022. Management remains focused on strengthening balance sheet; working capital reduced by Rs. 785 crore by liquidating old inventory, while debt was reduced by Rs. 1,939 crore to Rs. 654 crore in FY2021.
Digitalisation, higher sales from private brands, store expansion, and relevant new launches would benefit ABFRL in the near to medium term. We retain Buy with an unchanged PT of Rs. 255.
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