Aditya Birla Fashion and Retail (ABFRL) Investor Day 2025 summary

Strategic transformation and future direction

• The group executed a comprehensive transformation strategy, expanding into digital-first, ethnic, value, and luxury segments through organic and inorganic moves over the past five years.

• The business is now structured into two listed entities post-demerger: ABLBL (legacy/western/lifestyle brands) and ABFRL (ethnic, value, luxury, digital-first), each with distinct growth strategies and robust balance sheets.

• The demerger aims to unlock value, attract targeted investors, and enable sharper strategic focus for each business.

• Recent $500 million (INR ~4239 Cr.) equity raise and demerger have strengthened the balance sheet, enabling accelerated growth without further fundraises for the next 4-5 years except for TMRW.

• Management will prioritize disciplined capital allocation, organic expansion, and profitability, with flexibility to adapt to market volatility.

Market outlook and growth opportunities

• The Indian apparel and fashion market is poised for rapid growth, driven by rising per capita GDP, urbanization, and evolving consumer aspirations, with the consumption economy expected to reach INR 4 trillion crore.

• Key growth pillars include casualization, ethnic wear, digital-first brands, luxury, and value retail, each targeting distinct consumer segments and leveraging demographic trends.

• Both entities are positioned to capitalize on India's multi-decade consumption growth, focusing on premiumization, digitalization, and deepening market penetration.

• ABLBL targets 13-15% revenue CAGR, with profitability (EBITDA margin) expected to improve by 300-400 bps and ROC to exceed 70% as the business becomes debt-free and dividend-paying.

• ABFRL aims to triple its size by FY30, with value retail, ethnic, luxury, and digital-first businesses expected to grow 2.5x to 8x, targeting 15-16% EBITDA margin and 20% ROC.

Financial guidance and capital allocation

• ABLBL targets to double revenue and triple cash profits by FY30, with EBITDA margin expansion of 300+ bps and ROCE >15%.

• Both entities expect strong free cash flow generation, with ABLBL targeting debt-free status in 2-3 years and consistent dividend payouts.

• Demerged ABFRL expects to generate positive FCF from FY29, with improving working capital and profitability across segments.

• Core businesses are expected to grow 10-15% annually, high-growth businesses at 15-25%, and emerging businesses above 25-30%, with a focus on moving more brands into the core as they mature.

• Capital allocation will be aligned to business phase: core, growth, and emerging, with differentiated investment intensity.