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).
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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