ABFRL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 2.3

📊 Core Financials

• Revenue & Profitability: PAT worsened from -59.9 Cr. to -90.9 Cr., showing deepening losses.
• Margins: ROE at -3.01% and ROCE at -0.17% reflect negative efficiency and poor profitability.
• Debt: Debt-to-equity ratio of 0.45 indicates moderate leverage, manageable but concerning given losses.
• Cash Flow: Dividend yield is 0.00%, with no shareholder returns.

💹 Valuation Indicators

• P/E Ratio: Not applicable due to losses.
• P/B Ratio: Current Price 76.7 ₹ vs Book Value 66.8 ₹ → ~1.15x, fairly valued.
• PEG Ratio: Not available, reflecting lack of earnings growth visibility.
• Intrinsic Value: Current valuation is near book value, but weak fundamentals limit attractiveness.

🏢 Business Model & Competitive Advantage

• ABFRL operates in branded apparel and retail, with strong brands like Pantaloons, Allen Solly, and Van Heusen.
• Competitive advantage lies in brand portfolio and retail presence across India.
• However, profitability remains negative, limiting long-term resilience unless turnaround occurs.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive only near 65–70 ₹ range, closer to support levels and below DMA 200.
• Long-Term Holding: High-risk investment; suitable only for aggressive investors betting on retail sector recovery.

✅ Positive

• Strong brand portfolio with wide retail presence.
• FII holdings increased (+0.99%), showing some foreign investor confidence.
• P/B ratio (~1.15x) indicates stock is not excessively priced relative to book value.

⚠️ Limitation

• Negative ROE (-3.01%) and ROCE (-0.17%).
• Consistent losses with worsening PAT.
• No dividend yield, limiting income appeal.

📉 Company Negative News

• PAT worsened quarter-on-quarter (-90.9 Cr. vs -59.9 Cr.).
• DII holding reduced significantly (-4.07%), showing declining domestic institutional confidence.

📈 Company Positive News

• FII holdings increased (+0.99%).
• Stock trading near support levels, offering potential accumulation opportunity for turnaround investors.

🌐 Industry

• Industry PE at 55.9, much higher than ABFRL’s valuation, reflecting sector optimism.
• Apparel and retail sector benefits from rising consumer demand and urbanization trends.

🔎 Conclusion

• ABFRL is fundamentally weak with negative profitability and modest efficiency.
• Valuations are near book value, but losses limit attractiveness.
• Best suited for accumulation only near 65–70 ₹ levels.
• Long-term holding is risky unless profitability improves and sector recovery strengthens.