Aditya Birla Fashion Q3 - Stellar Performance On Strong Gross Margins, Cost Measures: Motilal Oswal
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Motilal Oswal Report
Aditya Birla Fashion and Retail Ltd.’s Q3 FY21 Ebitda (down 10% YoY) posted a massive 21% beat on better-than-expected revenue trends.
This was coupled with lower inventory markdown and strong cost measures, reflected in healthy gross margin recovery.
We revise our FY22E Ebitda by 17% on stronger recovery (estimated to recover to FY20 levels), coupled with better gross margins.
The company’s strong deleveraging (FY21 net debt estimated at approximately one-fourth of previous expectation) and high free cash flow should aid in renewing its aggressive growth as well as reduce the steep 2.5 times valuation gap versus peers
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