We value ABFRL at a SoTP-based TP of Rs80 given the varying positions of the different businesses in terms of maturity. We value Pantaloons at 6x Mar'27E EBITDA (in-line with other multi brand retailer in India with similar growth/profitability). The Ethnic and other businesses are yet to completely scale up and therefore we value them on an EV/Sales basis at 1x Mar-27E sales (delivering on growth but profitability remains subpar).

Key downside risks to our view on ABFRL are: a) significant market share gains across categories could aid reported growth more than expected; b) better-than-expected traction in relatively newer initiatives like ethnic wear; and c) greater-than-expected sustainability of cost-saving initiatives.


Key upside risks to our view include: a) more-than-expected discounting-led sales disruption in the market; b) inability to execute the fast store expansion targets or increase in debt levels; c) slower-than-expected growth in core business given focusing on multiple new initiatives; and d) further equity dilution.

Any of these risk factors could cause the shares to deviate from our target price.