Aditya Birla Fashion and Retail achieves 63% EBITDA growth in Q4FY24 amid market challenges

Aditya Birla Fashion and Retail Limited (ABFRL), a leading player in the Indian fashion and retail sector, reported a significant 63% year-on-year growth in EBITDA for the fourth quarter of fiscal year 2024, reaching Rs. 377 crore. This growth comes despite a sluggish market environment, highlighting the company’s robust strategy and operational efficiency.

Financial Performance and Market Strategy

The quarter witnessed an 18% increase in revenue, totaling Rs. 3,407 crore, driven by both established and newly integrated business segments. For the fiscal year, ABFRL’s consolidated revenue stood at Rs. 13,996 crore, marking a 13% increase from the previous year. The company’s strategic focus on cost control contributed to an EBITDA margin expansion of 300 basis points, achieving 11.1% compared to 8% the previous year.

ABFRL’s established businesses have adeptly navigated market headwinds, focusing on profitability enhancements. Meanwhile, its recent ventures in ethnic wear and partnerships with brands like Reebok have bolstered growth. The ethnic segment alone grew to 2.7 times its size compared to last year, excluding contributions from TCNS, which saw a 51% growth.

Strategic Developments and Future Outlook

In a strategic move to optimize growth and investor engagement, ABFRL announced the demerger of its Madura business into a newly formed entity, Aditya Birla Lifestyle Brands Limited (ABLBL). This restructuring is designed to create two independent growth engines with distinct capital structures and parallel value creation opportunities, aligning with the different risk profiles and business models of the two divisions.

The apparel market remains a significant segment in India’s discretionary consumer space, expected to grow at a double-digit compound annual growth rate (CAGR) in the coming years. ABFRL’s long-term strategy focuses on leveraging its extensive portfolio of renowned brands to secure a competitive edge in this expanding market.

Expansive Retail Network and Brand Portfolio

ABFRL boasts a widespread network of 4,664 stores across approximately 37,205 multi-brand outlets, with 9,563 point of sales in department stores nationwide. The company manages some of India’s largest brands, including Louis Philippe, Van Heusen, Allen Solly, and Peter England. Pantaloons remains one of India’s top fashion retailers.

The company’s international brands portfolio continues to thrive with partnerships that bring global fashion leaders like Ralph Lauren, Ted Baker, and Reebok to Indian consumers. In the ethnic wear segment, ABFRL has made significant strides with acquisitions and partnerships aimed at catering to diverse consumer preferences.