JM Financial Assigns Fair Values to ABFRL and Aditya Birla Lifestyle Brands Post-Demerger
JM Financial anticipates the equity shares of ABLBL will be listed between mid-June and end June 2025. Post-demerger, ABLBL aims to build stable growth while preserving solid financial performance.
JM Financial Assigns Fair Values to ABFRL and Aditya Birla Lifestyle Brands Post-Demerger
ABFRL shares turned ex-date on Thursday in relation to the demerger of Aditya Birla Lifestyle Brand. Post transaction ABFRL retains Pantaloons alongside Styleup stores as well as ethnic brands and luxury retail together with digital-first brands.
The spin off record date occurs today. ABFRL shareholders holding stocks today will receive ABFRL share price valued at Rs 10 for each of their ABFRL shares.
The market expects JM Financial to list ABLBL equity shares between mid and late June 2025. After splitting apart ABLBL will work towards establishing steady growth and profitable operations while ABFRL will prioritize expansion through value fashion and modern digital brands to improve its profit margins according to the domestic brokerage.
After the ABLBL demerger ABLBL listing date should achieve a valuation of Rs 103 which will represent 18 times EV/Ebitda for Pantaloons while reflecting 3 times EV/Sales for ethnic brands. Market predictions for March 2027 forecast digital brands to achieve a trading ratio of 1x EV/Sales. JM Financial predicts ABLBL could value up to Rs 186 when applying a 23x EV/EBITDA multiple to its lifestyle division and a 10x multiple to other business areas.
Bernstein forecasted the fair value for Aditya Birla Lifestyle Brands listing to range from Rs 185 to Rs 215 after demerger while its fair value for Aditya Birla Lifestyle Brands target fell between Rs 80 and Rs 105.
The ABLBL portfolio managed by JM Financial will feature India's top lifestyle brands including Louis Philippe, Van Heusen, Allen Solly and Peter England.
JM Financial projects lifestyle brands will maintain steady growth through network expansion and mid-single digit SSSG growth while Reebok and Van Huesen Innerwear will drive future expansion.
The company plans to double its revenue with an 11 per cent+ CAGR and triple cash profits throughout FY24-30 due to a 300 bps Pre-Ind AS Ebitda margin expansion reaching 11 per cent+ through operating leverage and profitability from other businesses.
