Aditya Birla Fashion and Retail Ltd. share price target

The demerger between ABFRL and ABLBL became effective from May 1, 2025. The demerged ABFRL reported high-single digit revenue growth and an improvement in profitability across businesses in Q4FY25.

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With a 2% downside from the CMP, we maintain our HOLD rating.

Aditya Birla Fashion and Retail’s (ABFRL) combined revenue grew 6% YoY, driven primarily by robust growth in ABFRL (demerged). EBITDA increased significantly, driven by improved profitability in Ethnic and Pantaloons and demerger-related adjustments.

Over the last few years, ABFRL has built its portfolio around five key consumption themes – western wear, ethnic wear, masstige and value retail, luxury retail, and digital brands – through organic and inorganic routes.

Aditya Birla Fashion & Retail Limited’s (ABFRL) Q3FY25 performance was driven by festive and wedding demand, leading to better LFL growth of key businesses, while overall demand sentiments continued to be muted.

With a 6% upside potential from the CMP, we maintain our HOLD rating

Aditya Birla Fashion and Retail (ABFRL)’s revenue growth remained muted at ~3% YoY (in line) in 3QFY25. The growth was driven mainly by Ethnic and TMRW (to be part of demerged ABFRL), whereas growth remained muted in Lifestyle Brands (robust LTL offset by weak wholesale) and Pantaloons (shift in Pujo dates).

With a 1% upside potential from the CMP, we maintain our HOLD rating.

Aditya Birla Fashion and Retail (ABFRL)’s consol. revenue grew 13% YoY,driven by TCNS consolidation and improvement in Lifestyle’s LTL growth.

Aditya Birla Fashion & Retail Limited’s (ABFRL’s) Q2FY2025 numbers were muted with revenues rising 13% y-o-y (LFL growth of key brands remained muted), while EBITDA margin stood flat y-o-y at 9.9% and adjusted loss widened y-o-y to Rs. 230 crore.

Recommendation With a 4% downside potential from the CMP, we maintain our HOLD rating.

Aditya Birla Fashion and Retail (ABFRL)’s consolidated EBITDA grew 23% YoY (12% beat), led by the Lifestyle/ABLFL others/Pantaloons segments.

Aditya Birla Fashion & Retail Limited (ABFRL) registered mixed performance in Q1FY2025 with revenue growing by 7% y-o-y (2% growth excluding TCNS), while EBITDA margin expanded 131 bps y-o-y to 10.5% (beating estimates), leading to 23% y-o-y EBITDA growth.

With an 8% downside potential from the CMP, we maintain our HOLD rating.

Aditya Birla Fashion & Retail Limited (ABFRL) registered good performance in Q4FY2024 with revenue growing by 18% y-o-y, while EBIDTA margin expanded 163bps y-o-y to 8.3%, leading to 47% y-o-y growth in EBIDTA.

ABFRL’s board has approved the demerger of its Madura business into a new
entity – ABLBL, upon the requisite regulatory approvals over the next 9-12
months. In our view, this move should unlock value through better capital
allocation and improved investor interest for the two businesses individually.

Aditya Birla Fashion and Retail’s (ABFRL’s) board approved the vertical demerger of Madhura Fashion (MFL) and
Lifestyle business into separate listed entity – Aditya Birla Lifestyle Brands Ltd (ABLBL). Existing shareholders will receive shares of the new entity in the ratio of 1:1.

Recommendation With a 5% downside potential from the CMP, we maintain our HOLD rating.

We maintain our HOLD rating to account for near-term challenges a slowdown in discretionary spends, a sharp increase in debt, an increase in ad spends and investment in TCNS and TMRW.