Aditya Birla Lifestyle Brands Ltd. is a key player in India’s apparel market, active for over 30 years. It boasts four major lifestyle brands, each surpassing Rs 10 billion in revenue. These brands have a strong presence, with more than 2,800 retail outlets, multi-brand stores, large format shops, and online platforms.
While the established lifestyle brands thrive, the company is now turning its attention to emerging brands like American Eagle (denim), Reebok (footwear), and Van Heusen Innerwear (athleisure). This strategy promises balanced growth, good profits, and strong cash flow.
Management aims to double revenue, targeting a more than 11% annual growth from FY24 to FY30. They plan to achieve this with sustained single-digit growth and by adding over 250 stores each year, building on a base of roughly 3,200 locations.
Recent data shows that the global athleisure market is projected to grow from $300 billion in 2022 to over $500 billion by 2028. This trend presents a significant opportunity for Aditya Birla’s emerging brands, especially in today’s casual wear landscape.
Revising our financial estimates for FY26-27, we expect revenue to grow at an average of 8% per year, with EBITDA rising by 11% and PAT by 24% from FY25 to FY28. We value the Lifestyle brands at a multiple of 12 times EBITDA for September 2027 and the Emerging brands at around 1.2 times sales.
For now, we maintain a Neutral outlook with a target price of Rs 150, suggesting a valuation of around 25 times EBITDA for September 2027, excluding certain accounting adjustments.
As market dynamics evolve, keeping an eye on consumer preferences and emerging retail trends is crucial for companies like Aditya Birla.
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Aditya Birla Lifestyle Brands Ltd
