Emkay Global Financial has given Buy recommendation for Aditya Birla Fashion and Retail with a target price of Rs. 400 in its research report issued on Feb 05, 2022

Emkay Global Financial’s report on Aditya Birla Fashion and Retail

ABFRL’s Q3 EBITDA was ~7% ahead of our estimates, largely led by ~150bps jump in gross margins vs. flat expectations. The beat on consensus nos. was higher on both revenue and margin fronts. Higher fresh mix and greater Lifestyle mix led to better margins. Q3 recovery highlights strong traction in core brands. ABFRL remains aggressive in entering new segments (ethnic/athleisure/D2C) through the inorganic route; it expects to build scale profitably in ethnic, and aims to become a major player in sportswear (Reebok). Margin improvement appears to be on track, and we expect ~400bps margin gains in FY22-24. In our view, operating leverage arising from strong growth, cost efficiencies and profitability turnaround in new segments should add more to margins beyond FY24E.


We raise FY23/24E EBITDA by 10-13% on strong recovery in the previously impacted Wholesale/Pantaloons and forecast FY20-24 EBITDA CAGR of ~30%. RoIC (ex-goodwill) is expected to improve to ~35% by FY24. Maintain Buy with a revised TP of Rs400.

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At 14:01 hrs Aditya Birla Fashion & Retail was quoting at Rs 278.65, up Rs 3.30, or 1.20 percent.

It has touched an intraday high of Rs 279.95 and an intraday low of Rs 274.30.

It was trading with volumes of 69,971 shares, compared to its thirty day average of 208,717 shares, a decrease of -66.48 percent.

In the previous trading session, the share closed down 1.26 percent or Rs 3.50 at Rs 275.35.

The share touched its 52-week high Rs 318.55 and 52-week low Rs 161.10 on 18 January, 2022 and 17 February, 2021, respectively.

Currently, it is trading 12.53 percent below its 52-week high and 72.97 percent above its 52-week low.

Market capitalisation stands at Rs 24,887.39 crore.

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