ABFRL拆分：能否创造价值？入门指南

F25E(96.4)19 May 2025286.05270.00364.50/231.301,371.04349,056386,6426M(1.1)5.4(6.5)05/2511501200125013001350140014501500 Aditya Birla Fashion and Retail LimitedRatingUnderperformPrice TargetABFRL.IN270.00 INRReported EPSF24AF25EF26EABFRL.IN (INR)(7.25)(2.97)(0.12)FinancialsF24AEBITDA (M)14,526Revenues (M)139,959Reported net income(7,359.10)(3,013.41)Source: Bloomberg, Bernstein estimates and analysis.ABFRL Demerger: Can it create value? A primerABFRL (Aditya Birla Fashion and Retail Limited) will be de-merged into two listed entities on therecord date of 22ndMay. In this note, we explore the two businesses in detail and what it maymean for the share prices of the two different listed companies.ABLBL (AB Lifestyle Brands)has strong legacy brands like Louis Philippe, Van Heusen, AllenSolly, Peter England, Reebok. ABFRL has ~8k Cr F25 revenue, ~16% EBITDA (post IND AS)but suffers on growth (F25 growth is ~0%).ABFRL-D (AB Fashion Retail-Demerged)hasa motley collection of Pantaloons, TCNS (Ethnic Women’s wear), Premium/ Luxury brands(Sabyasachi, Tasva) and TMRW (D2C brands) etc. ABLBL has ~8k Cr F25 revenue, ~10%EBITDA (post IND AS) and has grown faster.Demergeralso creates some challenges.Product and target CX overlap createscompetition amongst ABLBL/ABFRL brands. While demerger was announced in Apr’24,official split of financial statements are still not available. Moreover, Post IND AS EBITDAreporting is not very useful in our view.We don’t expect value creation to be automatic post demerger.Only Sanofi in our reviewwas able to create significant value given diversity of its two businesses being split. For others(ITC, Arvind etc.), the core business performance invites value creation. In short-term, weestimate a Rs 185-215 SOTP for ABLBL and Rs 80-105 for ABFRL.Path ahead - ABLBL:Growth is the key currency. Brand strength & profitability are wellaccepted. Can they deliver 15%+ EBITDA growth consistently? Is it as simple as adding moreretail outlets and ‘investing’ in the brand? We expect it to be tough journey where revenuegrowth will lead margin growth and build ~10% EBITDA CAGR F25-F27.Path ahead - ABFRL-D:Much trickier turn-around with multiple moving parts. Pantaloonsneeds growth & profit, TMRW needs profits, Ethnic need scale. We build ~11% post-IND ASEBITDA CAGR F25-27 given lower profitability in F25.Investment ImplicationsWe retain our Underperform rating for ABFRL overall with TP of INR 270.See the Disclosure Appendix of this report for required disclosures, analyst certifications and otherimportant information. Alternatively, visit our Global Research Disclosure Website.First Published: 20 May 2025 00:30 UTC Completion Date: 19 May 2025 18:11 UTC F26EN/M(6)%MarNA12M8.37.50.9 F25EF26ECAGR18,98121,906--153,470168,034--(121.20)--Close DateASIAXFYEDiv YieldEV (INR) (M)PerformanceAbsolute (%)ASIAX (%)Relative (%)INR380INR360INR340INR320INR300INR280INR260INR24005/24 DETAILSABLBL VS. ABFRL - A COMPREHENSIVE PROFILEABFRL (Aditya Birla Fashion and Retail Limited) will be split into two separate companies on 22ndMay 2025 (record date). Thetwo companies are ABLBL (Aditya Birla Lifestyle Brands Limited) and ABFRL-Demerged.1. WHICH BRANDS ARE PART OF WHICH COMPANY?ABLBLwill have a combination of two types of brands (Exhibit 1):.(a) Western wear legacy brands with strong recall and long history and(b) Growth brands/ segments like Reebok, American Eagle and Van Heusen InnerwearThe legacy brands are large - Louis Philippe (>INR 2000 Cr of revenue in FY24), Van Heusen (> INR 2000 Cr of revenue inFY24, including Van Heusen Innerwear), Allen Solly (> INR 1400 Cr of revenue in FY24) and Peter England (>INR 1250 Cr ofrevenue in FY24). Collectively, these legacy brands have ~INR 7000 Cr of revenue in FY24.The Western wear brands have a combination of 3 use-cases : Work Formal + Work Casual (~55% revenue across brands),Wedding (~10% revenue across brands) and True Casual (~35% of revenue across brands).ABFRL-Demergedhas a motley of multiple business, product segments and brands (Exhibit 2):(a) Pantaloons - a retail business with 62% of business coming from its own brands (as of 3QF25) and another 11% fromABLBL brands. It has an emerging value segment - StyleUp which is expected to drive most of the network growth goingforward.(b) Ethnic Segment - which is formed of 3 business units(i) TCNS - a retail business with 5 brands focused on Women’s ethnic wear - W, Aurelia, Wishful, Elleven, FolkSong.(ii) Designer brands - Sabyasachi, Tarun Tahiliani, Masaba, Shantanu-Nikhil.(iii) Premium brands - Tasva, Jaypore(c) Luxury Retail - The Collective and Galaries Lafayette (to be launched)(d) TMRW - A collection of digital-first brands like Bewakoof, Nober, Wrogn, TIGC etc.Overall, ABFRL Combined company has had a smorgasboard of brands trying to target every part of the customer price pointsand use-case (Exhibit 3). Most of these brands are acquired and not built organically. Many of these brands also overlap forcustomer profile