Aditya Birla Fashion and Retail Q4 Results Review - Healthy Top-line, GP; Margin Nosedives: Dolat Capital

"BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ABFRL’s Q4FY23 standalone revenue and GP were in-line. However, EBITDA was subdued led by tepid margin in core lifestyle business and persistent investments in new ventures. Revenue/GP grew by 21.5/19.2% YoY. EBITDA was -39% driven by higher rent and significantly higher A&P spend. Lifestyle is steady growth and FCF engine. Pantaloons can see margin boosts with improvement in through-put, while others (innerwear, youth and western wear, super-premium brands, Reebok, Ethnic etc) can provide strong growth. But, with number of business under growth/incubation stage and significant step-up in investments to support this businesses, earnings would continue to remain volatile. These coupled with large investments in TCNS (Rs 15.75bn cash and dilution of ~5.5%) and weak sales momentum, if any in core Lifestyle/Pantaloons to significantly weigh on BS. That said, ABFRL’s steep stock price correction of 30% in 12m and 45% from peak factors the concern. Stock may go through time correction but absolute price correction may be limited, if any. Reiterate BUY with revised TP of Rs 245 @ 12x EV/EBITDA for Lifestyle/Pantaloons and 1x EV/Sales for new businesses. Growth and margin sustenance in core Lifestyle/Pantaloons and profitable scale-up in others is key for re-rating. Potential fund infusion from GIC (by Nov’23) @ Rs 289/sh would be another near-term trigger..Aditya Birla Fashion and Retail Reports Q4 Net Loss At Rs 194.54 Crore.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Aditya Birla Fashion and Retail Q4 Results Review - Healthy Top-line, GP; Margin Nosedives: Dolat Capital

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Aditya Birla Fashion and Retail Q4 Results Review - Healthy Top-line, GP; Margin Nosedives: Dolat Capital

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