Sharekhan has given Buy recommendation for Aditya Birla Fashion and Retail with a target price of Rs. 255 in its research report issued on Mar 01, 2021
Sharekhan’s research report on Aditya Birla Fashion and Retail
Aditya Birla Fashion & Retail Limited (ABFRL) is eyeing a 15% CAGR in revenue growth over FY2020-26, by achieving a steady growth of 11-16% CAGR in the core businesses of Pantaloons and lifestyle brands and a scale-up in new businesses. The company aims to achieve OPM of 11.2% in FY26 from 7.6% in FY20 by improving product mix for lifestyle business, boosting store-level profitability of Pantaloons and making all new ventures profitable through scale-up. ABFRL is focusing on achieving cumulative free cash flow of Rs. 2,000 crore over FY22-26; RoCE of over 35% by FY26.
Outlook
Robust business model, structural growth story of branded apparel market and strengthening of balance sheet makes ABFRL a preferred pick in the discretionary consumption theme. We maintain a Buy with a revised PT of Rs. 255.