Sharekhan's research report on Aditya Birla Fashion and Retail
Aditya Birla Fashion & Retail Limited (ABFRL) registered third consecutive quarter of strong performance with a 3.6x y-o-y growth in standalone revenue; while EBITDA margin improved to 17.1% against a loss in Q1FY2022. Lifestyle brands and Pantaloons grew by 3.5x and 4.7x y-o-y, respectively. Ethnic brands’ revenue grew by 2.7x y-o-y. ABFRL has planned aggressive store additions across brands and targets to open 70-80 Pantaloons stores, ~60 Tasva stores and 60-65 House of Masaba stores. ABFRL is focusing on achieving strong earnings growth aided by category extensions, channel expansion, and enhanced digital capabilities.
Stock currently trades at 14.6x/11.6x its FY2023E/24E EV/EBITDA. We maintain Buy with an unchanged PT of Rs. 370.
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