ABFRL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.2
| Stock Code | ABFRL | Market Cap | 8,349 Cr. | Current Price | 68.5 ₹ | High / Low | 106 ₹ |
| Book Value | 66.8 ₹ | Dividend Yield | 0.00 % | ROCE | -0.17 % | ROE | -3.01 % |
| Face Value | 10.0 ₹ | DMA 50 | 72.4 ₹ | DMA 200 | 80.6 ₹ | Chg in FII Hold | -0.26 % |
| Chg in DII Hold | -0.17 % | PAT Qtr | -90.9 Cr. | PAT Prev Qtr | -59.9 Cr. | RSI | 48.6 |
| MACD | -2.63 | Volume | 72,66,536 | Avg Vol 1Wk | 53,24,818 | Low price | 59.8 ₹ |
| High price | 106 ₹ | Debt to equity | 0.45 | 52w Index | 18.8 % | Qtr Profit Var | 34.5 % |
| EPS | 0.00 ₹ | Industry PE | 43.7 |
📊 Aditya Birla Fashion & Retail (ABFRL) is currently facing weak fundamentals. The company has negative profitability metrics (ROE -3.01%, ROCE -0.17%) and reported losses in the latest quarter (PAT -90.9 Cr. vs -59.9 Cr. previously). Dividend yield is nil (0.00%), offering no income return. EPS is at 0, reflecting poor earnings visibility. The stock trades near its 50 DMA (72.4 ₹) and below its 200 DMA (80.6 ₹), indicating weak long-term momentum. With no meaningful P/E or PEG ratio due to losses, valuations are difficult to justify. Technical indicators (RSI 48.6, MACD negative) suggest neutral to bearish sentiment.
💡 Ideal Entry Price Zone: 60 ₹ – 65 ₹, closer to long-term support levels. Current price (68.5 ₹) is slightly above this zone, but still risky given weak fundamentals.
📌 Exit Strategy / Holding Period: If already holding, consider exiting on any rallies near 90–100 ₹ resistance levels. Long-term investors should avoid fresh entry until profitability metrics improve and consistent earnings growth is visible. Holding period should be limited unless the company demonstrates turnaround in margins and profitability.
Positive
- Strong brand portfolio under Aditya Birla Group.
- Debt-to-equity ratio of 0.45 is moderate and manageable.
- High trading volumes indicate active investor interest.
Limitation
- Negative ROE (-3.01%) and ROCE (-0.17%) show poor efficiency.
- Consistent quarterly losses (PAT -90.9 Cr.).
- Dividend yield is nil (0.00%), offering no income return.
- Stock trading below 200 DMA indicates weak long-term trend.
Company Negative News
- Quarterly losses widened compared to previous quarter.
- FII holdings decreased (-0.26%) and DII holdings decreased (-0.17%).
- MACD negative (-2.63) suggests bearish short-term momentum.
Company Positive News
- Part of Aditya Birla Group, offering strong backing.
- Moderate debt-to-equity ratio (0.45) provides financial stability.
Industry
- Industry P/E is 43.7, highlighting ABFRL’s inability to match peers due to losses.
- Retail and fashion sector has long-term demand potential driven by consumer spending growth in India.
Conclusion
⚠️ ABFRL is currently not an ideal candidate for long-term investment due to weak profitability and consistent losses. Entry should be considered only around 60–65 ₹ for valuation comfort, and only if signs of turnaround appear. Existing holders may exit near 90–100 ₹ resistance unless earnings improve significantly.