Aditya Birla Fashion & Retail Ltd's Q4FY18 standalone net profit rises 418.19% yoy to Rs113.12cr : Beats Estimates

The company’s standalone revenue stood at Rs1,753.59cr, up 8.59% yoy but down 5.45% qoq.

May 11, 2018 10:05 IST India Infoline Research Team

Aditya Birla Fashion & Retail Ltd Q4FY18

Standalone Results Q4FY18: (Rs. in cr)

Q4FY18 YoY (%)
Revenue 1,753.59 8.6
EBITDA 163.25 43.2
EBITDA Margin (%) 9.31 225
Net Profit (adjusted) 113.12 418.2
***EBITDA margin change is bps


Reco. Price


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ABFRL’s revenue grew by 8.6% yoy to Rs1,754cr, in-line with the estimate of Rs1,790cr, aided by strong revenue growth in Madura Fashion & Lifestyle segment. However, revenue declined by 5.4% qoq. EBITDA came in at Rs163cr, up 43.2% yoy and 18.1% qoq. EBITDA margin expanded by 225bps yoy and 186bps qoq basis to 9.31%. Adjusted PAT came at Rs113.1cr, up 418.2% yoy and 225% qoq owing to recognition of deferred tax asset of Rs68.82cr in this quarter. EBITDA and Adjusted PAT came higher than the expectation of Rs135cr and Rs30.2cr respectively.    

• Other expenses declined by 3.1% yoy and 10.2% qoq to Rs337.9cr, which has led to profitability expansion.
• Employee benefit expenses grew by 6.6% yoy  to Rs173.1cr. Same has declined by 17.1% qoq.
• Sales from Madura Fashion & Lifestyle segment grew by 11.1% yoy to Rs1,161cr.
• EBIT margin of Madura Fashion & Lifestyle expanded by 89bps yoy to 9.16%.
• Debt equity ratio of the company as on March 31, 2018 stood at 1.7 times vs. 2.13 times yoy.
• Company’s other division, Pantaloons’ network grew to 275 stores, spread across 98 cities in the country. Total addition of 66 stores in FY18.
• Company has added ~0.2mn sq ft retail area during Q4FY18 taking the total area to ~7mn sq ft.
• Strong wedding season towards end of Q3FY18 and early Q4FY18 bolstered sales.

Con Call Highlights
• Board approved fund raising of up to Rs1,000cr through equity or any other instrument convertible into equity. This will be used to strengthen the company’s balance sheet, which will ultimately drive growth. 
• Commenting on Walmart-Flipkart deal, Management believes that consolidation will bring stability in the industry. 
• E-commerce revenue contribution in Madura Fashion & Lifestyle is in mid-single digits range currently.
• Wholesale sales is expected to pick up from FY19E.
• Management intends to open 350 new stores (across various formats) in FY19E.
• Depreciation of Pantaloons has increased owing to rapid expansion of stores.
• Decline in fast fashion sales attributable to rationalization of unprofitable stores, which also led to reduction in losses. In Q4FY18, revenue from fast fashion declined by 20% yoy. EBITDA loss of fast fashion business stood at Rs5cr vs Rs20cr yoy EBITDA loss.

Technical View:

Aditya Birla Fashion & Retail Ltd ended at Rs. 150.95, up by 6.45 points or 4.46% from its previous closing of Rs. 144.50 on the BSE.
The scrip opened at Rs. 145.05 and touched a high and low of Rs. 159.30 and Rs. 144.35 respectively. A total of 46,29,966 (NSE+BSE) shares were traded on the counter. The stock traded below its 200 DMA.

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