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Motilal Oswal Report
Consistent revenue growth and steady margin expansion in Pantaloons with the refreshed brand identity, along with loss reduction in TCNS and scale-up of TASVA/OWND, remain the key long-term catalysts for Aditya Birla Fashion and Retail Ltd.
However, higher investments and/or slower profitability ramp-up in some of the currently loss-making businesses could remain a key drag on overall profitability and cash flows for Aditya Birla Fashion.
Motilal Oswal has tweaked its estimates for FY26 actuals and model a compound annual growth rate of ~13%/ 25% in revenue/reported Ebitda over FY26-28E, though it does not expect Aditya Biral Fashion to achieve pre-IND AS Ebitda breakeven by FY28.
The brokerage values the company on an SoTP basis and assigns an EV/Ebitda multiple of 9x to Pantaloons (inc. OWND!), and 13x to the designer-led ethnic portfolio.
The brokerage also ascribes EV/sales multiple of 1x/0.9x/1.5x to Aditya Birla Fashion’s attributable stakes in premium ethnic/TMRW/Luxury Retail portfolio to arrive at a revised target price of Rs 65 (earlier Rs 70). The cut in TP is largely attributed to higher net debt. Motilal Oswal reiterate Neutral stance of Aditya Birla Fashion.
Click on the attachment to read the full report:
Motilal Oswal Aditya Birla Fashion Q4 Results Review.pdf
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