Aditya Birla Fashion and Retail Ltd - Q4 FY21 Result Update - YES Securities

(Rating: Not Rated, CMP: Rs 191)

View - ABFRL reported an in-line performance for 4Q with strong cost controls leading to a margin expansion, but that was still not enough to get the company into profits. The fact that the company was not able to cross 4QFY20 sales was a bit disappointing. Given the ongoing uncertainties on the timing of markets reopening, 1HFY22 will remain weak which will put further pressure on the P&L. Debt levels can again increase given continued investments in ethnic wear, footprint expansion in both Madura and Pantaloons in addition to an increase in inventory levels. Key positives include reasonable valuations and the fact that the company is well placed for strong market share gains once the markets normalize given it is utilizing its strong balance sheet to ramp up its online and offline presence during this soft period. Overall, we expect the stock to remain range bound for now till demand trends start recovering around the festive season.

Topline growth - 4QFY21 sales almost similar to last year, down 1%, strong sales in smaller cities, best ever e-com performance with 2x growth, innerwear growth of 36%, ethnic portfolio up 165% given footprint expansion.

Margin performance - EBITDA growth of 51% yoy with 480bps margin expansion to 13.9% given strong recovery in sales coupled with slower restoration of costs, innerwear and other businesses turned EBITDA positive; Net comparable loss down to Rs 87crs vs Rs 147crs yoy.

Shares of Aditya Birla Fashion and Retail Ltd was last trading in BSE at Rs.195.15 as compared to the previous close of Rs. 191.05. The total number of shares traded during the day was 328774 in over 3704 trades.

The stock hit an intraday high of Rs. 196.8 and intraday low of 181.7. The net turnover during the day was Rs. 63063105.

Source : Equity Bulls

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