Buy Aditya Birla Fashion and Retail, target price Rs 340: ICICI Direct

ICICI Direct has buy call on Aditya Birla Fashion and Retail with a target price of Rs 340. The current market price of Aditya Birla Fashion and Retail is Rs 242. Time period given by analyst is one year when Aditya Birla Fashion and Retail Ltd. price can reach defined target.

Aditya Birla Fashion and Retail Ltd., incorporated in the year 2007, is a Large Cap company (having a market cap of Rs 22678.76 Crore) operating in Retail sector.

Aditya Birla Fashion and Retail Ltd. key Products/Revenue Segments include Apparels, Homemart & Accessories, Commission, Scrap, Export Incentives, Other Operating Revenue and Other Services for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2309.55 Crore, down -23.31 % from last quarter Total Income of Rs 3011.40 Crore and up 25.57 % from last year same quarter Total Income of Rs 1839.24 Crore. Company reported net profit after tax of Rs 30.76 Crore in latest quarter.

Investment Rationale
ABFRL combines Madura’s portfolio of leading power brands (Allen Solly, Van Heusen, Louis Philippe and Peter England) with Pantaloons’ forte of largest value fashion retailer. Overall revenue recovery rate reached 93% of pre-covid levels in FY22 mainly driven by strong show in lifestyle brands. New category launches in active wear and casual wear and robust store additions (140+) fuelled growth. Demand trends continue to be strong with major drivers being strong wedding season and revival of formal portfolio with opening up of offices. Ethnic space continues to be the next growth engine for ABFRL with the business currently operating at an annual run rate of Rs 400 crore. ABFRL has aggressive store addition plans for FY23E with 75+ Pantaloons store and 400+ (franchisee) lifestyle brand stores. The recent announcement of fund raise worth | 2195 crore (equity+warrants) to GIC, would enable ABFRL to meet its long term capital needs and improve its competitive positioning

Promoter/FII Holdings
Promoters held 56.09 per cent stake in the company as of 31-Mar-2022, while FIIs owned 13.19 per cent, DIIs 19.51 per cent.