Stay 'Neutral' On Aditya Birla Lifestyle Stock, Says Motilal Oswal Post Tepid Q1 Results — Check Target Price

While Lifestyle brands have achieved scale and healthy profitability, the company is now focused on scaling up its Emerging brands, such as American Eagle (denim), Reebok (footwear), and Van Heusen Innerwear (innerwear and athleisure). This provides a compelling retail play with balanced growth, profitability profile, strong cash generation, and robust return ratios.

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Motilal Oswal Report

Aditya Birla Lifestyle Brands Ltd. is a pioneer in India’s branded apparel sector with over three decades of operating history. Its four Lifestyle brands have each scaled beyond the Rs 10 billion mark, having established a widespread presence through 2,800+ retail outlets, multi brand outlets, large format store, and online channels.

While Lifestyle brands have achieved scale and healthy profitability, the company is now focused on scaling up its Emerging brands, such as American Eagle (denim), Reebok (footwear), and Van Heusen Innerwear (innerwear and athleisure). This provides a compelling retail play with balanced growth, profitability profile, strong cash generation, and robust return ratios.

Management is targeting to double revenue (11%+ CAGR) over FY24-30 through sustained high-single-digit LTL growth and an accelerated rollout of 250+ net store additions annually (on a base of ~3,200+ stores).

We fine-tune our FY26-27E forecasts with a modest change in revenue and Ebitda. We build in a CAGR of 8%/11%/24% for revenue/Ebitda/PAT over FY25-28E.

We ascribe a 12x Sep’27E EV/Ebitda multiple to Lifestyle brands and a ~1.2x EV/Sales multiple to Emerging brands.

We reiterate a Neutral stance with a target price of Rs 150 (implies ~25x Sep’27 pre-INDAS 116 EV/Ebitda).

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