ICICI Direct has given Buy recommendation for Aditya Birla Fashion and Retail recommended buy rating on the stock with a target price of Rs 360 in its research repo with a target price of Rs. 360 in its research report issued on Dec 15, 2021

ICICI Direct’s research report on Aditya Birla Fashion and Retail

ABFRL combines Madura’s portfolio of leading power brands (Allen Solly, Van Heusen, Louis Philippe and Peter England) with Pantaloons’ strength as largest value fashion retailer. The company has a robust distribution network having 2874 brand stores along with 342 Pantaloons stores. ABFRL has charted out growth strategies to become a ~US$2.8 billion entity (Rs 21000 crore) by FY26E, translating to 15% CAGR in FY20-26E.

Outlook

ABFRL has strengthened its balance sheet through recent equity infusion with net debt declining sharply from Rs 2500 crore to ~Rs 870 crore. We remain structurally positive and maintain BUY with a revised target price. We value ABFRL at Rs 360 i.e. 3.0x FY23E EV/sales.

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