Analyst Concall
Aditya Birla Fashion to open 15-20 Pantaloons stores FY26
This story was originally published at 20:24 IST on 17 February 2025
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--Aditya Birla Fashion: To complete demerger of Madura business in 2-3 months
--Aditya Birla Fashion: Overall demand environment remained subdued Oct-Dec
--CONTEXT: Aditya Birla Fashion mgmt's comments in post-earnings concall
--Aditya Birla Fashion: Upcoming quarters look fundamentally strong
--Aditya Birla Fashion: To scale up Pantaloon stores in metros, large cities
--Aditya Birla Fashion: Pvt label will be top sales priority for Pantaloons
--Aditya Birla Fashion: To close more smaller Pantaloons stores in Jan-Mar
--Aditya Birla Fashion: To close more semi-urban Pantaloons stores in Jan-Mar
--Aditya Birla Fashion MD: Expect 25-35% organic growth in TMRW brand
--Aditya Birla Fashion: Plan to open 40-50 Tasva brand stores in FY26
--Aditya Birla Fashion: To open 15-20 new Pantaloons stores in FY26
--Aditya Birla Fashion: Aditya Birla Lifestyle to be debt-free in 2.0-2.5 yrs
By Arya S. Biju and Avishek Rakshit
MUMBAI – Aditya Birla Fashion and Retail Ltd. plans to further scale up its Pantaloons segment by expanding stores in metros and large cities and premiumising its portfolio in the mid-market segment, Whole-Time Director Sangeeta Tanwani, chief executive officer of Pantaloons, said in a post-earnings analyst call. The fashion retail company plans to add 15-20 new Pantaloons stores in the financial year 2025-26 (Apr-Mar). By the end of FY25, the company would have opened 13-15 Pantaloons stores, with some set to be opened in the upcoming weeks.
The Pantaloons segment has been driving a premiumisation strategy where Aditya Birla Fashion and Retail has consciously moved away from the overcrowded value retail space. Pantaloons has exited over 40 stores in the past 12 months mostly in tier-2 cities and smaller markets, the company said. The company has exited several smaller towns as well as smaller-size stores which did not do justice to the overall stock position of Pantaloons. The company plans to close more small and semi-urban Pantaloons stores in Jan-Mar.
The company said the share of its private labels in sales has improved and it is working to make sure that the brand and label assortment is relevant for each city and store. Aditya Birla Fashion said its priority will be to work to make its private labels competitive and relevant, thus increasing their share in sales over time.
The Pantaloons segment reported a consolidated revenue of INR 13.05 billion for the December quarter with a festive like-for-like growth of around 6%, driven by superior fashion-forward merchandise, Aditya Birla Fashion said in its investor presentation after announcing its December quarter earnings. The segment's earnings before interest, tax, depreciation, and amortisation margin expanded 170 basis points on year to 19.3% for the quarter.
On the demerger of the Madura Fashion and Lifestyle business into a newly incorporated company named Aditya Birla Lifestyle Brands Ltd., the management said the demerger is progressing well and is set for completion within the next 2-3 months. The National Company Law Tribunal's hearing on the demerger is scheduled for the third week of March, it said. Aditya Birla Lifestyle Brands will be listed separately once the demerger is completed.
The proposed Aditya Birla Lifestyle business reported a consolidated revenue of INR 21.51 billion for the December quarter, and an EBITDA of INR 3.55 billion. The overall margin of the segment grew 90 bps on year to 16.5%. Aditya Birla Fashion said it expects Aditya Birla Lifestyle to be debt-free in about 2.5 years.
Aditya Birla Fashion said it has raised $490 million through qualified institutional placement and preferential issuance. The money will used to repay debt and to help the growth of recently established platforms of value retail, ethnic wear, and luxury retail within the proposed demerged Aditya Birla Fashion and Retail.
In the ethnic wear business, the company said it aims to aggressively scale up in TASVA, TCNS, and designer brands after the fund raise. It plans to expand TASVA in ready markets and to open 40-50 brand stores in FY26. In its digital-first brands portfolio, the company expects the 25-35% organic growth of the brand TMRW to continue. Revenue from the brand grew 26% on year in the reporting quarter, the company said in its presentation.
The company had reported consolidated revenue of INR 43.05 billion, up 3.3% on year amid the subdued overall demand environment in the December quarter, the management said. Its EBITDA margin for the quarter grew to 15.9%, from 14.5% a year ago. The company said it expects to maintain this margin growth going forward, and sees the upcoming quarters being fundamentally strong.
The company announced its Oct-Dec earnings after market hours Friday. Its consolidated net loss narrowed on year and sequentially to INR 513 million. This was the eight successive quarter of net loss for the company. On Monday, shares of the company closed 3.2% higher at INR 255.55 on the National Stock Exchange. End
US$1 = INR 86.87
Edited by Rajeev Pai
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