- 04 Nov 2022
- ICICIdirect Research
ABFRL reported healthy revenue growth (in-line with our estimates)ABFRL - 217 Change: -0.75 (-0.34 %)
On a favourable base, revenue grew by 50% YoY to Rs 3074.6 crore (I-direct estimate: Rs 3013.7 crore, three year CAGR: 10%). The accelerated trajectory was on the back of robust growth in Lifestyle brands (Allen Solly, Van Heusen, Louis Philippe and Peter England) with revenues increasing 45% YoY to Rs 1680 crore (three year CAGR: 10%). Retail channel (45% of sales) has been the fastest growing channel owing to aggressive store additions (added 40 stores in H1FY23) and heathy SSSG (27% in Q2FY23). While casual wear continued to grow well, there was also resurgence in demand for formal wear owing to opening of offices. Pantaloons division reported revenue growth of 65% YoY to Rs 1094 crore (three year CAGR: 6%). Pantaloons accelerated its store addition pace during the quarter with opening of new 21 outlets (had added only 4 in Q1FY23). Among other business, Innerwear and athleisure continued to perform well as it recorded highest ever quarterly sales (27% YoY and 1.9x of pre-covid levels). In the ethnic space, all the business combined reported a revenue of Rs 109 crore driven by network and category expansions. ABFRL has completed acquisition of Reebok India operations through signing of local asset transfer agreement on October 1, 2022
ABFRL sustained its healthy revenue momentum with highest ever sales in H1FY23 (Rs 5949 crore). Lifestyle segment continues to outperform with revenue per sq. ft. of Rs 9700 vs. Rs 6900 in pre-covid levels. Despite inflationary pressure, discretionary consumption stays strong at premium end. Robust SSSG and consistent E-commerce performance have been key drivers of growth. The period also saw an increase in marketing investments post a hiatus of more than 2 years since COVID, as the company reinvigorated its focus towards brand building and strengthening consumer connect. With capital infusion of Rs 770 crore by GIC, ABFRL continues to strengthen its B/s which would also support growth capital (H1FY23 Capex: Rs 309 crore vs. Rs 108 crore in H1FY22).