Citi has maintained a ‘Sell’ rating on Aditya Birla Fashion and Retail Ltd (AB Fashion), assigning a target price of ₹260 per share, indicating a potential downside of around 1.5% from the current market price of ₹263.90. The brokerage believes the company’s focus on profitability over expansion is prudent, but it could limit growth in the near term amid a weak demand environment.
Citi notes that AB Fashion has ruled out further mergers, acquisitions, or fundraising for the next 5–7 years. Instead, it aims to grow revenue at over 11% CAGR through FY24–30 while targeting a Pre-Ind AS EBITDA margin of 11%+. The company also expects to turn debt-free in the next 2–3 years. For the demerged ABFRL business, Citi forecasts revenue growth of 19%+ CAGR and positive free cash flow from FY29, with margin expansion to over 7%.
Despite these long-term plans, Citi highlights that persistent high operating and financial leverage, coupled with a lack of visible demand revival, could weigh on both growth and profitability in the short to medium term.
Disclaimer: This article is for informational purposes only. Investors are advised to consult certified financial advisors before making any investment decisions.
