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ABFRL posts strong business performance in a tough market

Nov '19
Aditya Birla Fashion and Retail Limited (ABFRL) posted a strong 14 per cent growth in sales to ₹2,297 crore in the quarter ended September 30, 2019. This was accompanied by a robust 10 per cent growth in EBITDA to ₹177 crore this year, on a comparable basis. Reported EBITDA for the quarter was ₹362 crore. The comparable net profit for Q2 FY20 is ₹30 crore.

For the first half of fiscal 2019-20, ABFRL recorded sales growth of 11 per cent at ₹4,363 crore. The comparable EBITDA for the period grew by 18 per cent to ₹334 crore with margins expanding from 7.2 per cent in H1 FY19 to 7.6 per cent in H1 FY20. During the period, the company posted 132 per cent increase in its comparable PBT at ₹112 crore from ₹48 crore last year. The comparable net profit for the period is ₹70 crore.

Madura business segment, which consists of Lifestyle brands – Louis Philippe, Van Heusen, Allen Solly and Peter England, Fast Fashion brands – Forever 21 and People and other businesses, recorded 16 per cent growth in revenue in Q2 FY20 at ₹1,463 crore as compared to ₹1,263 crore in the same period last year, with a 20 per cent growth in comparable EBITDA.

Lifestyle brands reported a 15 per cent jump in sales driven by exceptional growth in its new initiatives around womenswear and kidswear businesses. The revenues for the period grew from ₹1,090 crore last year to ₹1,254 crore in the same period this year, amidst difficult market conditions. The business witnessed a 12 per cent year-on-year increase in comparable EBITDA at ₹158 crore. For H1 FY20, the reported revenues grew 11 per cent y-o-y to ₹2,259 crore while comparable EBITDA for the business grew at 16 per cent to ₹252 crore over the same period last fiscal.

"Fast Fashion continues to operate on a calibrated business model. While People brand is gradually moving into Pantaloons, Forever 21 continues to run prudent operations with a focus on enhanced profitability," ABFRL said in a press release.

Other businesses rapidly scaled up with individual sub-segments viz. Innerwear and Global brands displaying a robust growth trajectory. The segment recorded a strong y-o-y growth of 59 per cent in revenue to ₹134 crore in Q2 FY20. For the first half of this financial year, the segment grew 67 per cent in sales to ₹259 crore.

"Innerwear business progressed on its aggressive growth trajectory with the launch of newer categories and styles, along with the expansion of its distribution network, which stands at ~18,000 outlets at the end of this quarter," the release said. Global brands grew fast, with strong same store sales growth across all portfolio brands.

Pantaloons recorded a robust 16 per cent growth on the back of strong LTL of more than 10 per cent and rapid store expansion, despite difficult market conditions. "Pantaloons segment reported revenue of ₹915 crore for the quarter as against ₹787 crore in Q2 FY19. This was driven largely by a superior product offering and intensified brand building. These initiatives have helped achieve 23 per cent growth in comparable EBITDA at ₹64 crore," the company said.

For H1 FY20, Pantaloons delivered a growth of 13 per cent in sales to ₹1,805 crore, with EBITDA margins expanding from 8.1 per cent last year to 8.4 per cent this year.

Fibre2Fashion News Desk (RKS)

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December 2019

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