Buy Aditya Birla Fashion and Retail; target of Rs 95: Sharekhan

Buy

Sharekhan's research report on Aditya Birla Fashion and Retail

The demerged ABFRL comprising Pantaloons (incl. Style-Up), ethnic, luxury retail and the digital-first ‘TMRW’ brands reported revenue growth of 9.2% y-o-y, with EBITDA margins rising 970 bps y-o-y to 11.9% and losses narrowing to Rs. 161 crore versus Rs. 287 crore in Q4FY24. With Rs. 2,350 crore of gross cash post the demerger, the management has outlined an aggressive roadmap, aiming to triple ABFRL’s revenue and double EBITDA margins in the next five years. It expects an annual capex of ~Rs. 400 crore. ABFRL plans to add 40-50 Style Up stores (versus 46 currently), 15-20 Pantaloons stores, and 25+ TASVA stores (versus 67 currently) in FY26.

Outlook

The stock trades at 20x/16x its FY26E/FY27E EV/EBITDA, respectively. We maintain a Buy with a revised SOTP-based PT of Rs. 95.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Aditya Birla Fashion and Retail - 10062025 - khan