Buy Aditya Birla Fashion and Retail, target price Rs 370: ICICI Direct

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Buy Aditya Birla Fashion and Retail, target price Rs 370:  ICICI Direct


ICICI Direct has buy call on with a target price of Rs 370. The current market price of Aditya Birla Fashion and Retail is Rs 312.05. Time period given by analyst is one year when it’s price can reach defined target.

Aditya Birla Fashion and Retail, incorporated in the year 2007, is a large cap company (having a market cap of Rs 29281.90 crore) operating in retail sector.

It’s key products/revenue segments include apparels, homemart and accessories, commission, scrap, export incentives, other operating revenue and other services for the year ended March 31, 2022.




Financials

For the quarter ended June 30, 2022, the company has reported a consolidated total income of Rs 2905.88 crore, up 25.82 per cent from last quarter total income of Rs 2309.55 crore and up 247.47 per cent from last year same quarter total income of Rs 836.29 crore. Company has reported net profit after tax of Rs 93.81 crore in latest quarter.

The company’s top management includes Mr.Kumar Mangalam Birla, Mr.Arun Adhikari, Ms.Preeti Vyas, Mr.Nish Bhutani, Mr.Sunirmal Talukdar, Ms.Sukanya Kripalu, Mr.Vikram Rao, Mr.Vishak Kumar, Ms.Sangeeta Pendurkar, Mr.Ashish Dikshit, Mr.Himanshu Kapania, Mr.Yogesh Chaudhary. Company has S R B C & Co. LLP as its auditors. As on June 30, 2022, the company has a total of 94 crore shares outstanding.

Investment Rationale
The stock price of ABFRL has appreciated ~63 per cent over the last three years. ABFRLhas strengthened its balance sheet through recent equity infusion and right issuewith net debt declining sharply from Rs 2500 crore (in FY20) to ~ Rs 650 crore. The brokerage believe ABFRL with lighter balance sheet and strong bouquet of brands is well placedto accelerate the pace of store addition and revenue growth. They reiterate BUYrating with a target price of Rs 370 (2.5x EV/sales FY24E).

Promoter/FII Holdings
Promoters held 56.09 per cent stake in the company as of June 30, 2022, while FIIs owned 13.24 per cent, DIIs 19.57 per cent.

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