2025-05-20-Jefferies-阿迪蒂亚·博拉时尚零售（ABFRL）_将于5月22日进行ABLBL剥离_11页_881kb

Aditya Birla Fashion & Retail (ABFRL) Demerger: ABFRL is de-merging its portfolio into two entities: Aditya Birla Lifestyle Brands (ABLBL) for western wear brands and ABFRL (de-merged) for residual businesses, effective May 22, 2025, with ABLBL listing expected mid-June. Existing shareholders receive one ABLBL share for each ABFRL share.

ABLBL: Focuses on western wear brands (Louis Philippe, Van Heusen, Peter England, Allen Solly) and growth businesses like innerwear and Reebok India franchise. Expected to be profitable with steady growth at 10-11% CAGR, generating pre-Ind AS Ebitda of >Rs6bn in FY25e. Valued at Rs215 per share.

ABFRL (De-merged): Includes Pantaloons retail and new ventures in ethnic wear, digital brands, and luxury retail. Anticipates PBT losses in the short term due to sub-scale growth and transformation initiatives, with breakeven expected by FY27e at 7% pre-Ind AS Ebitda margins. Revenue growth target of 15% CAGR; has Rs13bn net cash for scale-up. Valued at Rs100 per share.

Valuation and Rating: Overall BUY rating with price targets of Rs315 for the combined entity, Rs215 for ABLBL, and Rs100 for ABFRL (de-merged). Sum of parts (SoTP) valuation considers Pantaloons at 25x EV/EBITDA and other segments at 2x EV/Sales.

Risks: Key risks include heightened competition, potential losses in new ventures (e.g., TMRW, ethnic wear), and concerns over capital allocation despite execution focus on improving profitability and expanding value areas.