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Buy Aditya Birla Fashion and Retail; target of Rs 340: ICICI Direct

ICICI Direct is bullish on Aditya Birla Fashion and Retail has recommended buy rating on the stock with a target price of Rs 340 in its research report dated May 25, 2022.

May 26, 2022 / 09:17 AM IST

"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.

 
 
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ICICI Direct's research report on Aditya Birla Fashion and Retail


ABFRL combines Madura’s portfolio of leading power brands (Allen Solly, Van Heusen, Louis Philippe and Peter England) with Pantaloons’ forte of largest value fashion retailer. The company has a robust distribution network with 3091 brand stores along with 342 Pantaloons stores. ABFRL has charted out growth strategies to become a ~US$2.8 billion entity (Rs 21000 crore) by FY26E, translating to 15% CAGR in FY20-26E • It has enhanced focus on ethnic wear (through its recent acquisitions).



Outlook


ABFRL has strengthened its balance sheet through recent equity infusion with net debt declining sharply from Rs 2500 crore (in FY20) to ~Rs 504 crore We remain structurally positive and maintain BUY rating on the stock. We value ABFRL at Rs 340 i.e. 2.4x FY24E EV/Sales.

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first published: May 26, 2022 09:17 am
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