On Monday, Aditya Birla Fashion and Retail (ABFRL) disclosed a combined net loss of Rs. 187 crore for the three months ending in March. A year before, the business generated a net profit of Rs. 43.59 crore.
In comparison to the same quarter a year prior, the company’s consolidated revenue from operations increased by 26.14 percent to Rs 2,880 crore for the March quarter.
According to the company’s exchange report, total expenses increased 40% to Rs 3,178 crore, exceeding the growth in operations revenue, which increased 26% to Rs 2,880 crore. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins for the entire company decreased to 8% from 17.6% a year earlier.
The business added that on a solo basis. Due to slow sales, weaker retail throughput, and negative operating leverage, its quarterly EBITDA margins were affected.Over the past few years, ABFRL has made investments in a number of new firms, including those that are now losing money or stabilising. Analysts predicted that the list may grow as a result of the May acquisition of TCNS Clothing Co Ltd.
The retailer’s main Madura Fashion and Lifestyle division, which sells western clothes and athleisure casual sportswear, had an increase in revenue of roughly 30% to Rs 2,156 crore, accounting for 75% of the quarterly top line. Pantaloons’ clothing and accessory division saw an 18% increase as it added a net 25 outlets to its network during the quarter.With a sustained increase inAccording to the company’s exchange filing, the apparel market is poised for significant growth supported by premiumization and a faster transition from unbranded to branded products.
The business’s performance lagged behind those of other market leaders including Shoppers Stop Ltd, which turned a profit during the quarter, and Tata-backed Trent Ltd, which owns Westside and reported a record-breaking Q4 topline last month. Aditya Birla Fashion and Retail’s stock fell 0.52 percent at the close.
ABFRL entered into a binding contract earlier this month to buy the majority (51% of) shares in TCNS Clothing for Rs 1,650 crore.
In order to complete the transaction, the founding promoter’s stake will be purchased through a sale and purchase agreement and a conditional public open offer, which will be followed bya merger between the two entities.The value of the promoter stake and open offer consideration for TCNS is Rs 1,650 crore for 51 per cent stake, ABFRL said in a press release.
“As part of the transaction, ABFRL will make a conditional open offer to acquire up to 29 per cent stake at Rs 503 per share from public shareholders and acquire the remaining stake from the founder promoters to reach an overall shareholding of 51 per cent in TCNS,” ABFRL said.
