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Dolat Capital Report
Aditya Birla Fashion and Retail Ltd.'s Q3 FY23 revenue and gross profit were marginally ahead and healthy. Revenue/gross profit grew by 17/16% YoY and 31/35% versus pre-Covid.
However, driven by higher rent and significantly higher advertising and promotion spend, Ebitda/Adjusted profit after tax was down 19/down 70% YoY and up 10/down 21% versus pre-Covid.
Aditya Birla Fashion is a healthy and diversified portfolio mix of leading brands in Lifestyle, fashion retailing (Pantaloons and Style-Up), innerwear (Van Heusen), youth western wear, super-premium brands and ethnic luxury fashion. Madhura Fashion Ltd. is a steady growth and free cash flow engine, while others can provide strong growth and margin kicker.
Recent acquisition of Reebok, House of Masaba and entry into D2C platforms business shall further augment the growth momentum. Mgmt highlighted that it may overshoot its growth aspirations outlined in ‘Vision 2026' and may come up with revised guidance.
That said, with number of business under growth/incubation stage and significant step-up in investments to support this businesses, earnings continue to remain volatile and is a key concern
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