Buy Aditya Birla Fashion and Retail; target of Rs 200: Edelweiss

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Edelweiss' research report on Aditya Birla Fashion and Retail

Aditya Birla Fashion and Retail’s (ABFRL) 12.5% YoY revenue growth came in line with estimate, while EBITDA spurt of 30.7% and PAT at INR 218mn surpassed estimates. After 4‐5 quarters of decline, Lifestyle brands (core Madura brands) posted flattish SSG; this, coupled with increased transparency—reported 15.6% core EBITDA margin for the first time—is encouraging.

Outlook

Anchored by anticipated revival in Madura and Pantaloons, we are confident of resumption of strong growth trajectory starting H1FY18. We assign 20x FY19E EV/EBITDA and arrive at target price of INR 200. The stock is currently trading at 17.3x FY19E EV/EBITDA. We maintain ‘BUY/SO’.

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