Buy Aditya Birla Lifestyle Brands; target of Rs 140: Emkay Global Financial

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • ABLBL sustained its double-digit growth momentum, at ~11% yoy in 2Q, led by ~27% yoy growth in emerging businesses, while the lifestyle business grew 9% (5% LFL).
  • The company has taken price increases of ~6% for the season to offset higher input costs partly, with the full impact expected to reflect in 3Q.
  • Store expansion pace picked up, with 72 net stores added in 2Q, and the company expects to cross the 300 store-count mark by the end of the year.
  • Emerging brands continued to deliver strong momentum, with double-digit growth across brands and channels.

Thesis Validation Checklist

  • Growth momentum sustains, with steady-state growth of 11–12%.
  • Consumer response to price hikes remains a key monitorable.
  • Store expansion and distribution continue to improve, with a strong pipeline.
  • Emerging brands maintain their growth trajectory, with new launches gaining traction.
  • The company's ability to manage input cost inflation and maintain margins will be crucial.
  • Net debt reduction to ~Rs6bn by 4QFY27 and stronger cash flows in 2H are expected.