Aditya Birla Fashion and Retail Ltd. share price target

FY'21 saw the adverse impact of the Pandemic & Lockdowns which resulted in losses due to lower absorption of manufacturing costs. We believe the situation has improved since June this year with states opening up along with increased pace of vaccinations....

Higher-than-expected employee & other expenses resulted in PBT losses coming in ahead of our estimates PBT losses were at | 467 crore vs. | 121 crore in Q4FY21 and | 545 crore in...

We remain positive on the stock from a long-term perspective in light of immense growth potential. we maintain a BUY with TP of Rs 250/share valuing on a SOTP basis.

EBITDA loss was down to INR1.6b (v/s INR3.5b YoY), led by strong 2.5x revenue recovery YoY, much better than estimated (although still 63% below pre-COVID levels). The gross margin also inched to normalcy (up 810bp YoY). Subsequently, net loss declined to INR3.3b (v/s INR4.3b). Given the quicker recovery, we revise up our FY22E estimates, but maintain our FY23E estimates, keeping EBITDA at 18% above FY20 levels. The rise in net debt by INR5.5b is a dampener. However, it should largely reverse with...

Mixed quarter; long-term growth potential intact

We remain positive on the stock from a long-term perspective in light of immense growth potential. we maintain a BUY with TP of Rs. 220/share valuing on a SOTP basis.

Aditya Birla Fashion and Retail (ABFRL)'s revenue fell 2% YoY (in-line). However, healthy 200bp gross margin improvement (better than even preCOVID levels) and strong cost management (aided by rent/employee cost savings) drove a 65% YoY EBITDA jump. Nevertheless, the company posted net loss of INR1.3b (in-line) on tax and other income impact. Given the lockdowns amid the second COVID wave, we cut our FY22 revenue/EBITDA estimate by 29%/74%, marginally above FY21 levels. However, we expect swift recovery in FY23E, keeping the revenue/EBITDA estimate intact...

Chalks out a new 5-year growth strategy

Aditya Birla Fashion & Retail's (ABFRL) Q3FY21 revenue declined ~20% YoY (up 102% QoQ) to INR2,076cr (v/s est. INR1,722cr).

Lifestyle brands (50% of sales) witnessed a heathy recovery with sales declining 21% YoY to | 1026 crore. Retail channel recorded impressive recovery rate of ~92% driven by healthy net store addition pace (opened 88 stores in YTDFY21) and LTL growth of (-) 17%. Owing to excess inventory in MBO channels, primary sales to wholesale channels continued to be laggards with recovery rate of mere 37% (secondary sales recovery rate: 7080%). The business model of 12 season inventory cycle has assisted in smoothly aligning its inventory with the current demand scenario (category lines like work from home, athleisure). Revenue from other business (that...