Neutral Aditya Birla Fashion and Retail; target of Rs 85: Motilal Oswal

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

Aditya Birla Fashion and Retail (ABFRL) delivered a better-thanexpected operational performance in 1QFY26, with revenue growth of 9% YoY (strong performance in Ethnics and TMRW) and EBITDA growth of 25% YoY (~22% beat,) driven by 16-24pp improvement in profitability for Ethnics and Luxury Retail. TMRW raised ~INR4.4b from ServiceNow Ventures for ~11% stake, valuing the company at ~INR40b. The funds would be used to accelerate growth through increased branding activities and offline expansion for key brands.

Outlook

We value ABFRL on the SoTP basis. We assign EV/EBITDA multiple of 11x to Pantaloons and EV/sales of 1x to other businesses of ABFRL (demerged) on Sep’27E. We reiterate our Neutral rating with an unchanged TP of INR85.