Neutral Aditya Birla Fashion and Retail; target of Rs 190: Motilal Oswal

Motilal Oswal recommended Neutral rating on Aditya Birla Fashion and Retail with a target price of Rs 190 in its research report dated August 06, 2023.

Broker Research

August 08, 2023 / 15:34 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Aditya Birla Fashion and Retail

Aditya Birla Fashion and Retail (ABFRL)’s 1QFY24 saw weak performance. EBITDA was down 38% YoY translating into a net loss of INR1.6b (more than estimated), as weak market conditions hurt Lifestyle/Pantaloons’ SSSG (-3%/- 8% YoY) coupled with significant losses of INR700m in new ventures viz., Ethnic, TMRW and others. Management indicated that demand conditions remained weak in both value and premium categories, which may recover during the festive season. It is also likely to reduce the pace of new store openings, mainly in Pantaloons. This weak demand along with heavy investments in new businesses could put pressure on its earnings over the next 4-6 quarters. Accordingly, we cut our FY24/25E EBITDA by 8-10% building in 17% EBITDA CAGR over FY23-25E. Reiterate Neutral.

Outlook

We value ABFRL on an SoTP basis, assigning EV/EBITDA of 11x to Lifestyle Brands, 11x to Pantaloons, and EV/sales of 1x to other businesses on FY25E to arrive at our TP of INR190. Reiterate Neutral.

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