Aditya Birla Fashion Retail Ltd (ABFRL) reported a net loss of ₹200 crore for the second quarter ending September 30, 2023 (Aditya Birla Fashion Q2). This significant loss contrasts sharply with the ₹29 crore net profit recorded in the same quarter of the previous year. The company attributed this downturn to sluggish consumer spending and a delayed festive season.
Despite the challenging market conditions, ABFRL’s revenue from operations saw a modest increase of 4.9%, reaching ₹3,226 crore compared to ₹3,075 crore in the corresponding period of the last fiscal year. The shift of the festive period to the third quarter contributed to the muted revenue growth. The company acknowledged the impact of sluggish market conditions on its performance during Aditya Birla Fashion Q2.
Operating performance also weakened, with EBITDA declining by 18.8% to ₹323 crore in Q2 2023, compared to ₹398 crore in the same period last year. EBITDA margin contracted to 10% from 13% year-on-year. This decline in profitability further underscores the challenges faced by the company during the Aditya Birla Fashion Q2 period.
ABFRL completed the acquisition of TCNS Clothing Co Ltd, now a 51% subsidiary. This strategic move bolsters ABFRL’s portfolio with the addition of a premium ethnic womenswear segment, filling a significant gap in its offerings. Brands like W, Aurelia, Wishful, Elleven, and Folksong now provide a comprehensive range of ethnic wear under the ABFRL umbrella. This acquisition is expected to significantly contribute to ABFRL’s long-term growth strategy, even as the company navigates the current challenges highlighted in the Aditya Birla Fashion Q2 results.
ABFRL continues to face headwinds from subdued discretionary spending and a slow recovery in rural markets, particularly impacting the value and masstige segments. Despite these challenges, the company remains committed to its long-term strategic vision. The Aditya Birla Fashion Q2 results reflect the broader economic trends impacting the retail sector.
The Aditya Birla Fashion Q2 results were released after market hours. Prior to the announcement, ABFRL’s shares closed at ₹215.10 on the BSE, down 1.44%. The market reaction to the Aditya Birla Fashion Q2 results will be closely watched in the coming days.
