Aditya Birla Fashion Analyst Meet Takeaways - Focus On Scaling Up New Businesses: ICICI Securities
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ICICI Securities Report
Aditya Birla Fashion and Retail Ltd.’s management, at its recent first-ever annual investor day update call unveiled its five years’ growth strategies.
Key takeaways include
1. targeting 15% revenue compound annual growth rate over FY20-26E with ~360 basis points margin expansion to ~11% resulting in 3.4 times FY20 Ebitda and pre-tax return on capital employed of ~25% by FY26E;
2. free cash flow generation of Rs 10 billion after incurring capex of Rs 20-25 billion over FY22-26E;
3. new businesses (including innerwear and ethnic wear) are expected to grow more than 30% CAGR on a low base and constitute ~22% of revenue by FY26E from less than 10% in FY20.
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