Aditya Birla Fashion Q3 Results Review - Near-Term Focus On Margins A Positive: Systematix

Systematix Research Report

Aditya Birla Fashion and Retail Ltd. reported a higher-than-expected loss but better than expected topline and margins with strong profitability improvement in core businesses with new businesses providing strong growth in a sluggish demand environment.

Revenue was up 16.1% YoY (standalone up 5% YoY) at Rs 42 billion in a sluggish demand environment, led by strong traction in new businesses (20% of revenue) and continued investments in footprint expansion, marketing and digital.

Revenue growths in Lifestyle and Pantaloons stood at -3% (negative like-to-like)/12% (LTL 3%).

New store additions and brand building initiatives drove 190% (43% excluding TCN Clothing Co, Ltd.) growth in the ethnic segment while innerwear grew 5% YoY despite weakness in athleisure, with TMRW and Reebok showing robust growth at 3.7 times/ three times versus last year.

Gross margin grew 187 basis points YoY to 56.5%, while Ebitda margin expanded 114 bps YoY to 13.3% led by festive shift and strong focus on profitability measures. Adjusted loss stood at Rs 1,149 million impacted by increase in depreciation (+40% YoY) and high interest cost (+86% YoY) due to the debt taken to fund the TCNS acquisition.

Aditya Birla Fashion added net 36 stores in Lifestyle, net seven stores in Pantaloons and 14 stores for Ethnic brands other than TCNS Clothing.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.