ABFRL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 2.6

Here’s a detailed analysis of Aditya Birla Fashion and Retail Ltd (ABFRL)

🧾 Core Financials

Profitability & Growth

PAT has worsened from ₹-21.9 Cr to ₹-59.9 Cr, indicating deepening losses.

EPS: -₹1.08 — negative, reflecting poor earnings performance.

ROE: -3.01% and ROCE: -0.17% — both negative, signaling inefficient capital deployment and operational stress.

Debt & Liquidity

Debt-to-equity: 0.41 — moderate leverage, manageable but concerning given negative returns.

Dividend Yield: 0.00% — no payout, typical for loss-making or reinvestment-focused companies.

📊 Valuation Indicators

Metric Value Industry Avg Remarks

P/E Ratio — 45.0 Not meaningful due to negative EPS

P/B Ratio ~1.32 ~3.5 Reasonably priced on book value

PEG Ratio — ~1 Not applicable due to losses

Intrinsic Value ~₹75–₹80 — Slightly overvalued

Valuation is difficult to justify without earnings. P/B is reasonable, but lack of profitability clouds intrinsic value.

🏢 Business Model & Competitive Edge

Core Operations: Apparel retail across premium, value, and ethnic segments (Pantaloons, Van Heusen, Allen Solly, etc.).

Strengths

Strong brand portfolio and pan-India retail footprint.

Backed by Aditya Birla Group, offering financial and strategic support.

Risks

Persistent losses and negative return ratios.

FII (-4.57%) and DII (-2.51%) outflows suggest waning institutional confidence.

📉 Technical & Entry Zone

Current Price: ₹89.9

DMA 50/200: ₹81.9 / ₹87.3 — trading slightly above key averages.

RSI: 64.6 — approaching overbought.

MACD: 3.16 — bullish momentum.

Suggested Entry Zone: ₹75–₹80 range, ideally near ₹70.6 support or below intrinsic value.

🕰️ Long-Term Holding Guidance

Avoid fresh entry until profitability improves and ROE turns positive.

Hold only if already invested, with a long-term view and tolerance for volatility.

Ideal for long-term only if

Turnaround in earnings and ROCE > 10%.

Sustained revenue growth and margin expansion across segments.

Would you like a peer comparison with Trent or a breakdown of ABFRL’s ethnic wear and digital strategy?

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