Aditya Birla Fashion and Retail Ltd. | Company Update

28th January 2021 By Edelweiss

Aditya Birla Fashion and Retail (ABFRL) has announced a strategic partnership with designer brand Sabyasachi Couture Pvt Ltd. As per the contours of the partnership, ABFRL would acquire 51% stake in the luxury brand ‘Sabyasachi’ for a cash consideration of INR398cr. The deal is expected to be completed over 30-45 days, subject to statutory approvals and signing of definitive agreements.

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Key Highlights
  • With Sabyasachi acquisition, ABFRL will strengthen its position in ethnic-wear category (largest and amongst the fastest growing apparel segments). This is in line with its stated long-term strategy of building a formidable play in the ethnic wear segment. Through the Sabyasachi brand, ABFRL will be able to tap the luxury segment across categories (apparels, jewelleries and accessories).
  • Thus, we have assigned a multiple of 3x sales for Lifestyle, 1x sales for other businesses and 10x EV/EBITDA for Pantaloons. We reiterate our BUY rating on the stock with a target price of INR210/share.

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