Aditya Birla Fashion and Retail Limited, also known as ABFRL, is an Indian fashion and lifestyle company which is primarily engaged in the business of branded apparels.
The market capitalisation of Aditya Birla Fashion and Retail Limited, as of July 13, 2018, is a little over Rs.10,500 crore.
Company’s Wealth and Recent Performance
For the March quarter of the financial year 2017-18, the company reported its total income to be at Rs.1,764 crore. The same figure, for the year ended on March 31, 2018, was disclosed to be at Rs.7,214.22 crore, in comparison to Rs.6,671 crore reported for the previous fiscal year.
Despite this increase in revenue, the company’s margins were impacted by an increase in expenditure for the entire year. The company’s total expenses for the year were revealed to be at Rs.7,165.25 crore, as against Rs.6,617.63 crore for the FY 2016-17.
As a result, the net profit after tax for the period was stated to be at Rs.117.79 crore, in comparison to Rs.53.50 crore reported for last year. This translates into a roughly 100% increase in PAT and it came on the account of deferred tax.
For the FY 2017-18, Aditya Birla Fashion and Retail reported its earnings per share to be at Rs.1.52, in a stark contrast to Rs.0.69 reported for the previous year.
The company’s non-current liabilities for the year were reported to be worth Rs.1,469 crore of which, Rs.1,187 crore are long-term borrowings. This is a minor reduction in debt over the same period, last year. As for its total assets, they are worth Rs.5,733.84 crore. Its debt-equity ratio for the year is 1.70.
Aditya Birla Fashion and Retail Limited Stock Trends in 2018
On January 2, 2018, the share price of Aditya Birla Fashion was Rs.170.70 on the National Stock Exchange. In the first week of the month, the price rose marginally by 5% to touch the Rs.179 mark. However, this was immediately followed by a gradual decline in the stock price, driven by the resignation of the CFO of the company. By the end of January, the stock price of Aditya Birla Fashion had reached close to Rs.160.
This price continued to fall over the months of February and March, this time the cause being turbulent market conditions across the globe. In this period, the Aditya Birla Fashion and Retail shares lost more than 15% to go down in the Rs.130 territory. The shares also hit their 52-week low in the period at Rs.133.85. However, the prices recovered slightly in the final week of March. The closing price on March 28, 2018 was Rs.150.85.
Through the months of April and May, the Aditya Birla Fashion shares traded hands at level varying around the Rs.145 mark. The scrip didn’t make any steady gains in the period. On a couple of occasions, the shares did cross the Rs.150 mark although they failed to sustain at those levels. The closing price of Aditya Birla Fashion and Retail Limited at the end of May was Rs.148.30.
A similar trend was seen in the month of June as well. The shares continued to move on a downward trajectory and they eventually found themselves in the Rs.130 region. The closing price on June 29, 2018 was Rs.138.
Aditya Birla Fashion and Retail Stock Trends in 2016 and 2017
The Aditya Birla Fashion shares started 2016 on a high note as the scrip commenced the year trading at Rs.248. Instead of continuing on the upward path, the shares shed 10% in the first half of the month. By early February, the shares had lost more than 20% and they were being traded in the Rs.180 region. The scrip continued to deteriorate further as the shares lost another 20% by mid-February to go below the Rs.150 mark.
The prices continued to be highly volatile over the next couple of months. Over the course of March, April, and May, the share price of Aditya Birla Fashion never went beyond Rs.160. The scrip was bearish and there was no relief for the investors. By the end of May, the shares had lost more than 40% since the start of the year.
At the start of June 2016, the Aditya Birla Fashion and Retail Limited shares commenced a recovery. This bull run was seen all the way through to late August and the scrip in this period moved up roughly 20%. One of the factors that drove this spike was the acquisition of Forever 21 in India. In fact, in the final week of August, the shares were seen trading in the Rs.170 territory for a short while.
For the final few months of the year, the Aditya Birla Fashion shares resorted back to their bearish behaviour. Over the course of September, the shares shed their recently made gains although they were quick to make up for some of it in October. However, in November, post demonetisation, the share price went down by close to 15% and retreated back into the Rs.140 territory. The closing price at the end of the year was Rs.138.05
2017 started on a positive note for the investors. The scrip started the year trading at around Rs.140. Over the course of January and February, the Aditya Birla Fashion and Retail Limited stock price rose steadily to ascend back into the Rs.150 region. Investors made decent gains in this period. The rise was halted in early March, although it was only for a brief period.
The share price rose once again in late March and this time, the shares were heading closer to the Rs.180 mark. The scrip continued to be quite volatile over the course of the next few weeks, with the stock price varying from Rs.160 - Rs.180. This behaviour was seen all the way through to mid-July. This gradual rise was followed by a bear run. One of the factors that led to this fall was the resignation of CEO in late August.
By October, the Aditya Birla Fashion share price had retreated back to its previous levels at Rs.150. Things didn’t change much until late November, when the prices rose once as investors became confident of the company’s performance in the future. The closing price on December 28 was Rs.171.35.
Should you invest in Aditya Birla Fashion and Retail Limited?
Aditya Birla Fashion and Retail Limited is undoubtedly one of the largest companies in the retail clothing sector. It owns some of the most popular apparel brands in the country - Louis Philippe, Van Heusen, Peter England, Pantaloons, et cetera. The company is on course to diversify its offerings by entering into partnerships with various international brands like Ted Baker, American Eagle, and Simon Carter.
Even though the company is a part of the famed Aditya Birla Group, ABFRL itself hasn’t been able to reflect those philosophies in its financial performance. For the year ended on March 31, 2018, the company reported a profit of around Rs.118 crore, more than half of which came on the account of deferred tax. The company has reported losses all the way from 2013-16 and it wasn’t until 2017 that the company reported a profit.
In terms of profit, the Aditya Birla Fashion and Retail Limited is quite close to the likes of Trent and Future Life. However, these companies are significantly behind Avenue Supermarts whose profits for the year is more than Rs.700 crore. In the retail segment, it would make sense to go with Avenue Supermarts in a bid to diversify your stock portfolio.
Considering the performance of the Aditya Birla Fashion scrip, the stock has hardly delivered any returns since 2016. In fact, since the start of 2018, the stock has been on a bear run driven by turbulent market conditions across the world. While the future prospects of the company do look good, it is strongly recommended to do a thorough research before investing.
Aditya Birla Fashion and Retail Limited, previously known as Pantaloons Fashion and Retail Limited, is a branded apparel company based in Mumbai, India. The company has been a part of the Indian market for more than a decade now and owns several popular fashion brands in the country - Louis Philippe, Allen Solly, Van Heusen, and Peter England. In addition to this, Aditya Birla Fashion also owns Pantaloons - one of the largest fashion retailers in India. It also owns the exclusive rights for Forever 21 in India, thus enabling ABFRL to truly consolidate its position in the Indian apparel industry. Its branded apparels are sold in more than 400 cities and towns across the country through more than 4,000 departmental stores and multi-brand outlets.
History of the Company
The company was incorporated in the year 2007 as Peter England Fashions and Retail Limited. Over the years, the company strengthened its position in the Indian fashion market and became a household name. Aditya Birla Fashion and Retail Limited came into existence after the consolidation of three branded apparel businesses - Pantaloons Fashion and Retail Limited, Madura Fashion & Lifestyle, and Aditya Birla Nuvo Limited’s (ABNL) Madura Fashion Division. It was, in fact, the acquisition of Pantaloons by ABNL from the Future Group that paved way for the company to become one of the largest players in the fashion retail segment.
Management of the Company
Mr. Ashish Dikshit - Managing Director
Mr. Dikshit presently serves as the Managing Director of Aditya Birla Fashion and Retail Limited - a post he has held since February 1, 2018. He has been a part of the retail industry for more than 14 years and in his illustrious career, he has held various important positions such as Director of Peter England Fashions & Retail Limited, Business Head of Madura Garments Lifestyle Retail Company Limited and its Chief Executive Officer. Mr. Dikshit graduated as an Electronics & Electrical Engineer from IIT Chennai. He also obtained an MBA from IIM-Bangalore.
Mr. Pranab Barua - Non-Executive Director
Mr. Barua currently serves as the Non-Executive Director of Aditya Birla Fashion and Retail Limited. He was appointed to the post in February 2018 and in addition to this, he also serves as a Business Head of Retail and Apparel at Aditya Birla Management Corporation. He has been with the company for quite some time now, having served as its Managing Director and Executive Director from 2009 until 2018. He has professional experience of more than 35 years and has worked for various companies in different industries. Some of his key positions include Sales and Marketing Director of Brooke Bond India Limited, Chairman and Managing Director of Reckitt Benckiser, and CEO of Reckitt & Colman of India Limited. He graduated in English Honours from St. Stephens College, Delhi.
Mrs. Sukanya Kripalu - Independent Director
Mr. Kripalu is a part of the Board of Directors at Aditya Birla Fashion and Retail Limited. She is also a part of the Board of Directors of other companies as well, namely Ultratech Cement Limited, Aditya Birla Health Insurance, Huhtamaki PPL Limited, and Colgate-Palmolive India. She has also served as the Chief Executive Officer at Quadra Advisory. She is a graduate of St. Xavier’s College, Mumbai and also holds a PG degree from IIM-Calcutta.
Aditya Birla Fashion and Retail Limited Stock Listings in NSE, BSE, and Indices
The Aditya Birla Fashion and Retail Limited equity shares are available for trading on the country’s two major stock markets - the National Stock Exchange of India Limited and the Bombay Stock Exchange. The respective codes for the same are as follows:
NSE Code: ABFRL
BSE Code: 535755
Coming to the stock market indices, ABFRL comprises the following indices:
NIFTY Full Midcap 100
NIFTY Midcap 150
S&P BSE 200
S&P BSE LargeMidCap
S&P BSE 500
S&P BSE MidCap
S&P BSE AllCap
Aditya Birla Fashion and Retail Limited
7th Floor, Skyline Icon Business Park
86-92, Off A.K. Road,
Marol Village, Andheri East,
Mumbai - 400059
Contact number: +91-86529-05000
Stocks vs. Mutual Funds: here's what we recommend
Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds.It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.
The contents of this post/blog does not constitute financial or other professional advice nor does it imply in any manner a principal-agent relationship, and is not a professional advice on a specific financial matter.