Business Insights:

ABFRL has a healthy and diversified portfolio mix consisting four leading menswear brands, Pantaloons in the value-fashion retail format, men/women’s innerwear through Van Heusen’s brand extension, and women’s fast-fashion venture – Forever 21.

Pantaloons has undergone revamp over the years post its acquisition. The strategy has been to tap the lucrative value-fashion format with small store size. Accordingly, 213 new Pantaloons stores were added over FY14-19. We find comfort in these efforts, and thus, expect earnings to revive over FY19-21.

The recently launched men’s innerwear segment under the well-known Van Heusen brand should see robust ~2x revenue growth and EBITDA breakeven by FY21, driven by ramp-up in distribution. The lifestyle segment consisting of four marquee brands and product extensions should achieve moderate growth over FY19-21.

ABFRL targets to add 400 Lifestyle stores in FY20; while 30-40 People stores should move to Lifestyle. It is targeting mid-teens revenue growth for Lifestyle/ Pantaloons with 2-3% margin improvement for Pantaloons.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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