Aditya Birla Fashion and Retail Limited – A Complete Study

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With revenue of Rs 8,788 crore and spanning a retail space of 8.1 million sq.ft, Aditya Birla Fashion and Retail Limited (ABFRL) is India’s first billion-dollar pure play fashion powerhouse with an elegant bouquet of leading fashion brands and retail formats.

ABFRL emerged after the consolidation of the branded apparel businesses of Aditya Birla Group comprising ABNL’s Madura fashion division and ABNL’s subsidiaries – Pantaloons Fashion and Retail (PFRL) and Madura Fashion & Lifestyle (MFL) in May 2015.

Post the consolidation, PFRL was renamed as Aditya Birla Fashion and Retail Ltd. ABFRL brings together the learnings and businesses of two renowned Indian fashion icons, Madura Fashion & Lifestyle and Pantaloons creating a synergistic core that will act as the nucleus of the future fashion businesses of the Aditya Birla Group.

As a Fashion conglomerate, ABFRL has a strong network of 3,031 brand stores across 750+ cities of India. It is present across 25,000 multi-brand outlets and 6,000+ point of sales in department stores across India. It has around 35 million loyal customers.

It has a repertoire of leading brands such as Louis Philippe, Van Heusen, Allen Solly, and Peter England established for over 25 years. Pantaloons is one of India’s largest fast-fashion store brands. The company also holds exclusive online and offline rights to the India network of California-based fast fashion brand Foreover21.

The international brand’s portfolio boasts of – The collective, India’s largest multi-brand retailer of international brands, Simon Carter, and select mono brands such as American Eagle, Ralph Lauren, Hackett London, Ted Baker, and Fred Perry. Van Heusen Innerwear, Athleisure, and activewear are establishing themselves as India’s most innovative and fashion brand. Pantaloons alone has its own 37 brands.

All these brands of ABFRL covers all taste of fashion, from traditional to western and for all age groups. Louis Philippe has 457 total stores, Van Heusen has 410 total stores, Allen Solly has 345 total stores, Peter England has 1,023 total stores, Pantaloons has 342 total stores.

The company added a record 400 new stores to their network. The business also carried forward its legacy of being the innovation leader by taking the lead on moving to a 12 season design to market cycle, aiming at a faster go-to-market strategy.

The new growth initiatives around women’s and kids wear business gained significant momentum. ABFRL has identified inner wear and ethnic wear segment as two priority growth areas.

Both these categories are attractive from the perspective of overall size as well as poor penetration of brands. The company’s play in the inner wear and athleisure space is through its brand Van Heusen.

The foray has gained a strong foothold, with the product now selling across 20,000 trade outlets, key departmental stores, and large e-commerce platforms.

The brand is known distinctively for its innovative products, premium imagery, and wide range. ABFRL has around ten manufacturing plants. Out of these ten, eight plants are situated in Karnataka, and one each is situated in Tamil Nadu and Orissa.


The global apparel Market is projected to grow in value from US$1.5 trillion in 2020 to about US$2.25 trillion by 2025, showing that the demand for clothing is on rise across the world.

Demand Share of apparel market worldwide from 2005 to 2020, by region:

    Countries        2005         2015        2020
Europe          39          27          26
North America          26          22          22
Asia Pacific          23          36          38
Rest Of the World          12          14          14

Revenue of the apparel market worldwide from 2012 to 2025 (Figures in US$ billion)

                   Year                  Revenue
                   2012                  1,328.19
                   2013                  1,391.13
                   2014                  1,453.27
                   2015                  1,511.64
                   2016                  1,570.36
                   2017                  1,636.69
                   2018                  1,719.41
                   2019                  1,802.59
                   2020                  1,460.06
                   2021                  1,705.53
                   2022                  1,883.79
                   2023                  2,028.63
                   2024                  2,145.38
                   2025                  2,246.62


The overall Indian apparel segment size in FY20 was around USD 67 billion. The market is projected to grow at 10% CAGR to reach USD 107 billion by FY2025.

This growth is expected to be driven by factors such as more purchasing power driving growth in primary discretionary spending, better access, and availability of products, acute brand consciousness, increasing urbanization, and increasing digitalization.

Indian Fashion Market (Figures in US$ Billion):

                     Year      Indian Fashion Market
                   2015                     41
                   2018                     55
                   2020                     67
                   2025 (Predicted)                    107

The branded apparel sector will witness a growth of 13.4% CAGR over the next five years as against the 10% CAGR projected for total apparel sector.

Penetration of Branded Apparel and Organized Apparel Retail as a % of Apparel Market:

            Year    Branded Apparel  Organized Apparel
           2012               25             20
           2018               38             25
           2020               48             33
           2025               56             40

The ratio of contribution for men’s wear: women’s wear: kids wear stands at 41:38:21 for the apparel industry, whereas globally, the share of women’s wear is larger, when compared to men’s wear, making it a growth opportunity.

The inner market in India had a market size of USD 3.5 billion as of 2017, which is expected to grow at 11% CAGR to USD 11.5 billion by 2027.

The premium branded innerwear market is currently underpenetrated in India and offers significant opportunities for growth.

ABFRL, which is one of the leaders in Indian fashion industry, have succeeded in emerging as category leaders with a presence across price segments of value, premium, super premium & luxury and a balance portfolio across segments of men’s casual wear & formal wear, women’s formal, casual & ethnic wear and kids wear.


The apparel market in India is dominated by the Western wear market (contribution 69% in FY2020) and is expected to grow and contribute 72% by FY 2025.

With an increasing number of working women, a shift towards aspiration rather than need-based buying is expected to drive the western wear market in India.

The ethnic wear market is also expected to grow at 7.8% and reach nearly USD 30 billion in FY 2025 from USD 20.6 billion in FY2020.

This ethnic wear market is dominated by women’s wear as Indian women, Indian and ethnic fashion is a mainstream need for daily wear use (in addition to strong occasion wear) whereas for men it currently restricted to occasion wear viz, weddings and festivals.

Breakup of Western Wear & Ethnic Wear (Figures in %):

           Year      Western Wear      Ethnic Wear
           2015             65             35
           2018             68             32
           2020             69             31
           2025             72             28


The western wear market in India is expected to grow at a CAGR of 10.9% between FY2020 and FY 2025.

Overall Western Wear Market (Figures in US$ Billion):

                     Year  Overall Western Wear Market
                     2015                       27
                     2018                       37
                     2020                       46
                     2025                       77

In FY2020, men’s western wear accounts for nearly 93% of the total men’s wear market of USD 28 billion, while in women western wear holds 32% of the total USD 25 billion women’s wear market.

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Within the kid’s segment, western wear accounts for 86% of the total USD 14 billion kid’s wear market.

This implies that men and kids western wear is the mainstay for western wear in India.

Western Wear Market Mix (Figures in %):

        Year       Men’s     Women’s        Kids
        2015         58          17         26
        2018         57          17         26
        2020         56          17         26
        2025         55          19         26

Branded Vs Unbranded Mix in Men’s Wear (Figure in %):

           Year         Branded      Unbranded
           2015             42            58
           2018             52            48
           2020             57            43
           2025             60            40

Branded Vs Unbranded Mix In Women’s Wear (Figure in %):

           Year         Branded       Unbranded
           2015             38              62
           2018             48              52
           2020             53              47
           2025             55              45

Branded Vs Unbranded Mix In Kids Wear (Figure in %):

           Year         Branded        Unbranded
           2015              23              77
           2018              42              58
           2020              48              52
           2025              51              49

T-shirts is considered as one of the most comfortable and dynamic categories of western wear. Due to its knit fabric, fits and the versatile use, it is highly acceptable to a wide segment of customers.

Due to comfort choices for fabric, design, fits categories such as shirts along with tops, trousers and skirts are quite popular with youth in both urban as well as rural areas.

The Indian denim market is exhibiting continuous growth over the years. With new technologies, trends and higher market rich, this sector has promising growth potential.

Even in rural areas, denim is becoming highly fashionable with most men and teenage girls opting for denim wear over traditional outfits. Denim is a high-growth category as it is fashionable and comfortable, and enhances the style quotient.

The value growth within denim wear owes to increased demand for stretch and light fabric, varying colors, styling, and detailing. This trend is emerging across all categories (men’s, women’s, and kids).

Key Western Wear Categories (Figures In %):

      Particulars     Share in Total       Western Ware      Growth Rate
Trousers           19.1             6.0
Shirts           18.2             5.7
Innerwear           13.8           10.0
T-shirts           10.8             9.2

Share of Casual & Formal in Men’s & Women’s Western Wear (Figures in %):

      Particulars          Men’s        Women’s
Casual            68              77
Formal            32              23

Men’s casual wear is growing at a CAGR of 11%, men’s formal wear is growing at a CAGR of 7%, women’s casual wear is growing at a CAGR of 12.5%, women’s formal wear is growing at a CAGR of 8%.

The premium and super-premium segments enjoy 17% of the total apparel market, with the mid, economy, and mass segments making an equitable contribution share of 28% each.

Organized brick & mortar will continue to enjoy the larger, sizeable share at USD 32.5 billion, and three times the scale of online retail. Leading brick & mortar retailers will lead this offline to online drive compared to the online horizontal and vertical players.


  • Youth as a growth driver: India will have the highest young population by 2025. Increasing disposable income, comfort, quality, and brand consciousness are major reasons behind increasing acceptance of western wear among this young population.
  • Influence of International brands: The entry of international brands in the country is one of the biggest drivers of western wear. With the increasing exposure to international fashion trends, the Indian consumer today is aware of global trends and has given him more variety to choose from.
  • Increased rural spending: Rural areas are developing at a rapid pace and so is their purchasing power. With the percolation of mass media, people in rural areas are also aware of fashion trends. Their inclination towards western trends is another reason for the growing demand for western wear in rural areas.
  • Casualization of Fashion: The Indian casual wear market has evolved significantly over the years. Casual wear categories such as denim, activewear, casual shirts, and fashionable skirts are outpacing the growth of formal wear in India. This is reflective of the changing consumer trend and increasing usage of casual wear in offices as well as at home. This shift in consumer’s wardrobe towards casual wear has acted as a growth driver for western wear in India.
  • Rise of Athleisure: Athleisure is another growing segment which is growing faster and there is opportunity for brands to enter this segment. The athleisure trend has really caught up over the last decade as there has been a growing health and fitness related awareness among Indian consumer, especially the young consumers who have taken up different fitness activities such as yoga, running, etc.
  • Lifestyle brands increase their brand assortment: Lifestyle brands such as Arrow, Louis Philippe, Park Avenue, Van Heusen are leveraging and combining their popularity and brand presence to increase their assortment width by extending into related categories as accessories, footwear, innerwear as they move into tier II & III cities.
  • Rise of Private Label: Branded penetration in the market has a skew towards mid to premium price points and there is very limited offering in the value price points leading to pricing gaps in the market. These gaps in the market have provided an opportunity for retailers to launch their private label in the value segment.


The overall Indian inner wear market in FY2020 was around USD 6.5 billion with women’s category contributing nearly 2/3rd of the market.

The women’s mid –premium to premium segment is fragmented in products and prices with no leadership.

Women are looking for enhanced attributes such as plus size, maternity bras & shapewear, and formats and brands have not geared up to meet these customer service demands. There is thus a place for vertical specialists.

Innerwear Market – FY 2020E (Figures in %):

       Segment            Men         Women
Economy             47              43
Mid             35              40
Premium             16              15
Super Premium              2               2

Currently, unorganized general trade segment dominates channel dynamics with 85% contribution share.

Owing to distribution focus by brands combined with display characteristics, the hosiery store format will continue to be important in future as well.


           Year    Market Size
           2020            1.9
           2025            3.1

Men’s inner wear is a relatively small part of overall western wear category, contributing 8% to the overall in FY 2020 (USD 1.9 billion) and is expected to grow at 10.3% to contribute nearly USD 3.1 billion by FY 2025.

Men’s innerwear market in the Economy segment is growing at a CAGR of 5.5%, Men’s innerwear market in mid-segment is growing at a CAGR of 11%, Men’s innerwear market in the premium segment is growing at a CAGR of 11.5%.

The men’s innerwear market in a super-premium segment is growing at a CAGR of 25%.


Women’s inner wear category is currently estimated at around USD 4.4 billion and is expected to grow at a CAGR of 14% and nearly doubled by FY2025 to reach USD 8.5 billion. Women’s inner wear market in economy segment is growing at CAGR of 11.5%. Women’s inner wear market in mid segment is growing at CAGR of 17.5%. Women’s inner wear market in premium segment is growing at CAGR of 20%. Women’s innerwear market in super premium segment in growing at CAGR of 20%.

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Indian consumer no longer sport formal or casual attire for family functions and marriage ceremonies, they prefer ethnic wear that reflects uniqueness of the Indian cultural ethos.

While, the appeal of apparels inspired by local/regional designs, raw materials, styles etc in other market is restricted to occasion wear and does not extend daily wear use.

In such case Indian ethnic fashion has succeeded to retain its mainstream appeal. In the overall segment, women’s contribution to the overall ethnic wear pie is almost 9 times to that of men’s contribution.


                   Year                     Market
                   2015                       1.2
                   2018                       1.5
                   2020                       1.8
                   2022                       2.9

Men’s Ethnic Wear Mix (Figures in %):

                 Segment    Total Share in Ethnic Ware
Nehru Jacket                      15
Indo Western                      20
Sherwani                      30
Kurta Sets                      35


                Segment   Total Share In Ethnic Ware
Saree                     42
Salwar Kameez/Kurti                     51
Blouse/Petticoat                      7

The women’s ethnic wear market contributes nearly 70% of the overall women’s apparel category. The market is expected to grow at a CAGR of 7.6% and grow from USD 16.8 billion in FY 2020 to USD 24.3 billion in FY 2025. 

Women’s Ethnic Wear Breakup (Figures in US$ Billion):

   Segment      2015      2018      2020     2025
Saree     5.5     6.5     7.1     9.0
Salwar/kameez/kurta     5.4     7.0     8.6   13.9
Blouse/petticoat     0.9     1.1     1.2     1.5

Women’s ethnic wear has transitioned from just being traditional wear to daily wear that combines tradition with contemporary fashion.

Ethnic wear categories have maintained salience across geographies as well as across consumer segments of varying social-economic strata, age groups and lifestyles, in spite of the increasing penetration of western wear.

The mix of key formats in the women’s ethnic wear retailing is depicted in the chart below:

Split of Women’s Ethnic Market Across Formats (Figure in %):

        Particulars   Market Share in     Women’s Ethnic            wear        CAGR
National             43           36
Private Labels             18           25
Regional Brands             18           13
Online Focused             21           51


  • 1) Growing preference of occasion – specific clothing is making ethnic wear the most preferred choice for social functions.
  • 2) The ethnic wear consumers are seeking association with brands.
  • 3) The deep value-conscious consumers prefer private labels for everyday use, wait for discounts and promotions.
  • 4) Focus of large format stores on ethnic wear.
  • 5) Consumers are increasingly adopting alternate retail channels for ethnic wear as well.
  • 6) Mix and Match.
  • 7) Heterogeneous wardrobe.
  • 8) Movement from RTS/Tailoring to ready to wear options.


Men’s Apparel Market:

          Year  Total Market Share        (US$ Billion)
       FY2020            27.7
       FY2025            45.3

Growing at CAGR of 10.3%

Segment Wise Men’s Apparel Market

      SegmentFY2020(US$bn)FY2025(US$bn)   CAGR(%)
Formal        14.3         21.6        8.6
Casual        6.8         13.2       14.2
Innerwear        1.9           3.1       10.3
Active Wear        0.9           1.7       13.6
Others        3.8           5.7         8.4

Women’s Apparel Market:

                 Year   Total Market Share (US$ bn)
                 2020                     24.9
                 2025                     39.9

Growing at CAGR of 9.4%

Segment Wise Women’s Apparel Market:

     SegmentFY2020(US$bn)FY2025(US$bn)   CAGR (%)
Ethnic        16.9        24.4        7.6
Innerwear          4.4          8.5      14.1
Formal          1.0          1.8      12.5
Casual          0.9          1.9      16.1
Others          1.7          2.4        7.1

Overall Men’s Wear (Figures in US$ Billion)

                     Year    Overall Men’s Wear Market
                  FY2015                       17
                  FY2018                       23
                  FY2020                       28
                  FY2025                       45

In Men’s western wear category, the market is expected to grow at 10.36% from USD 25.9 billion in FY 2020 to USD 42.2 billion by FY2025. Shirts and trousers are the two biggest components contributing nearly 50% of overall category.

Denim and activewear are the fastest-growing categories, growing at near 15% between FY 2020 and FY 2025.

Men’s Western Wear (including Innerwear) – FY 2020:

         Segment        US$ Billion        Percentage
Shirts              7.3              28
Trousers              6.0              23
Suits/coats/safaris suit              1.0               4
Winter wear              1.6               6
T-shirts              2.1               8
Denim              4.7              18
Active Wear              0.9               3
Others              0.4               2
Inner Wear              1.9               8

Men’s Western Wear (including Innerwear) – FY 2025

        Segment       US$ Billion        Percentage
Shirts            11.0              26
Trouser              9.3              22
Suits/coats/safari suit              1.3               3
Winter wear              2.3               6
T-shirts              3.9               9
Denim              9.3              22
Active Wear              1.7               4
Others              0.5               1
Inner Wear              3.1               7


Women’s apparel market contributes 37% to the overall apparel market and it is expected to grow from USD 25 billion in FY 2020 to touch USD 39 billion by FY 2025.

Overall Women’s Wear (Figures in US$ Billion):

                   Year          Overall Market
                   2015                    16
                   2018                    21
                   2020                    25
                   2025                    39

Growing at CAGR of 9%

The overall women’s western wear category in FY2020 is estimated to be around USD 8 billion and is expected to grow at a CAGR of 13% over the next 5 year period to reach USD 14.7 billion by FY 2025.

In the women’s wear category, inner wear has the biggest share with share of more than 55% in FY2020 and is expected to increase its share to 58% by FY2025.

Categories like tops, denim, sleepwear, and winter wear contributed 8-9% each in the overall women’s western wear segment in FY2020 and these segments are expected to continue their strong trajectory over the next 5 year period as well.

Women’s Western Wear (including Innerwear) – FY 2020:

         Segment      US$ Billion      Percentage
Tops/shirts            4.4            55
T-shirts            0.6             8
Denim            0.3             4
Formal jackets            0.6             8
Sleepwear            0.1             2
Trousers/skirts            0.7             8
Winter wear            0.3             3
Others            0.7             9
Inner wear            0.3             3

Women’s Western Wear (including Innerwear) – FY 2025:

         Segment      US$ Billion      Percentage
Tops/shirts            8.5             58          
T-shirts            1.1              8           
Denim            0.6              4            
Formal jackets            1.3              9            
Sleepwear            0.2              1            
Trousers/skirts            1.0              7            
Winter wear            0.5              3            
Others            1.0            7            
Inner wear            0.4            3            


Kid’s wear market in India is currently about USD 14 billion (FY2020) and is expected to grow at a CAGR of 10.5% and grow to nearly USD 23 billion by FY2025.

Uniforms, t-shirts/shirts and bottom wear are the three biggest categories contributing at 37%, 24% and 18% of the overall kids wear market as on FY 2020. Kids denims is showing the fastest growth rate of 13% among all the other product categories.

Kid’s Wear Breakup (Figures in US$ Billion):

    Product Category    2015    2018   2020   2025
Tee/Shirts     1.8     2.6    3.3    5.8
Denim     0.2     0.3    0.3    0.6
Bottom wear     1.5     2.1    2.5    4.1
Winter Wear     0.8     1.0    1.2    1.8
Inner wear     3.0     4.1    5.1    8.4
Others     1.0     1.3    1.5    2.1

Kids Wear Market In Urban India (In INR Crores):

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         Year       Market Size
         2018          67,000
         2023       1,23,000

Channel Mix (Figures in %):

   Segment     2015     2018     2020     2025
Traditional Retail       72       70       67      59
Organized Brick & Motor       26       27       29      30
Online        2        3        4      11


The online apparel retail market in FY 2020 was USD 2.9 billion. Men (50%) and women (44%) segment contribute to bulk of online apparel market with kids contributing only 6% of the market.

The high share of the men’s segment in the online apparel market is driven by the high penetration of casual wear categories.

Evolution of Online Retailing in India:

                    Year               Evolution
                    2000Online retail initially was focused on providing products without much focus on customer service and experience.
                    2010Entry of vertical players at small scale in chosen metro cities. Low consumer adoption and limited selection.
                    2015Entry of horizontals and expansion to non-metros for verticals.
                    2019Strong stake in both metros and smaller cities driven by growing selection, offers and innovative business models.

Business Models for fashion e-commerce (Figures in %):

           Business Models              Percentage
Horizontal Marketplace (wide category, multi brand focus): Amazon, Flipkart, Snapdeal, Paytm                65-70
Vertical Brand aggregrator (Narrow Category, multi brand focus): Myntra, Limeroad, Ajio                  20
Western Private Label led (Narrow category, focus on private label + other brands)                   3
Ethnic Fashion Led (narrow category, ethnic focus) Jaypore, Craftsvilla)                   2
Online extension of B&M retailers (Narrow category, single/multi brand focus)                5-8

Online shoppers in India are expected to reach about 300 million by 2025. There was 85% rise in online shoppers in India in 2020 alone, attracted by huge discounts and deals plus the convenience and safety of remote shopping.

The Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2018. Growing at CAGR of 30%, and have a market penetration of 12% compared to 2%.

Share of various segment in E-commerce retail by value (2020):

                 Segment                Percentage
Consumer electronics                      40
Apparels                      40
Food and Grocery                       7
Jewellery                       7
Furniture                       4
Others                       2

Projected Online Apparel Sales (In INR Crores):

                   Year        Online Apparel Sales
                   2018                 25,750
                   2023                 95,500


Indian retail market is estimated to reach US$ 1.75 trillion by 2026, from US$ 0.79 trillion in 2018, growing at a CAGR of 9-11%.

India is largely an unorganized retail market, contributing 88% to the total retail sector in India. The organized retail market is currently valued at $60 billion, while the unorganized market holds the rest.

The share of the organized retail market is projected to increase to 22-25% by 2022, thereby reducing the unorganized retail market’s share to 77%.

The organized retail market, therefore, has the potential to reach approximately $140-160 billion. India is Asia’s third-largest retail market and the world’s fourth-largest after the U.S, China, and Japan.

India is expected to become the third-largest consumer market by 2025. India’s retail market contributes 10% to India’s GDP. It has an 8% share in India’s employment.


  • 1) Income growth: Projected 3x increase in average household income, from USD 6,393 in 2010 to USD 18,448 in 2020.
  • 2) Growing Consumption: India’s consumption expenditure to reach US$ 6 trillion by 2030.
  • 3) Growing Urbanization: By 2030, 40% of Indians will be urban residents. Rural per capita consumption to grow 4.3 times by 2030, compared to 3.5 times in urban India.

Increasing Urbanization (Figures in %):

                    Year               Urbanization
                    2000                      28
                    2005                      29
                    2010                      31
                    2015                      33
                    2018                      34
                    2025                      37
  • 4) Shifting Family Structures: The portion of nuclear households is currently 70%, and is projected to increase by 74% by 2025. The nuclear family spends 30% more per capita than joint families.
  • 5) Attitude shifts: By 2030, 370 million generation consumers, between the ages of 0-25 will have grown up in India with the internet, smartphones, and digital media.
  • 6) Growing Digital Influence: Digital influenced spending is currently between US$ 45-50 billion a year and is projected to reach US$ 550 billion by 2025. This will account for 30-35% of all retail sales.
  • 7) Increase in Online spending: By 2026, the number of online shoppers is projected to increase from the current 15% to 50% of the total online population.
  • 8) Huge middle income population: By 2030, middle income and high-income households will drive nearly US$ 4 trillion of incremental spending.

Total Households As Per Income Brackets (In Millions) (As Per Indian Rupees, 2000):

      Particulars            2018           2023
Rs 90,000 (Deprived)            66.5           54.5
Rs 90,000 to 2,00,000 (Aspirers)            102            96
Rs 2,00,000 to 10,00,000 (Middle Class)             79          121.5
  • 9) Growth of rural consumption and breakdown of the urban-rural paradigm: By 2030, rural per capita consumption will grow 4.3 times. In Urban India, it will grow 3.5 times.
  • 10) Young working age majority:  With the median age of 31 by 2030 (versus 42 in China, 40 in the U.S), India will remain one of the youngest nations in the world.
  • 11) One billion diverse internet users: By 2030, access to the internet will extend to about 1.1 billion Indians and 9 out of 10 Indians over the age of 15 years will be online.
  • 12) Huge Millennial Population: By 2030, India will have nearly 90 million new households headed by millennials.
  • 13) Increase in Internet penetration: Internet penetration rose from 8% in 2010 to almost 25% in 2016. It is likely to reach 55% or more by 2025, and reach 850 million users. By 2022, India will have more internet users than the entire population of six G7 countries.
  • There were 624 million internet users in India in January 2021. The number of internet users in India increased by 47 million (+8.2%) between 2020 and 2021. Internet penetration in India stood at 45% in January 2021.
  • The Internet contributed 16% to India’s GDP. The internet economy contributed up to $537.4 billion to India’s GDP in 2020. The overall India internet gross merchandise value grew to $65 billion in 2020 and is now creating a large impact on the overall economy with almost 4.6% of total private consumption coming from India’s internet.
  • India internet is expected to cross triple-digit GMV for the first time in 2021 and eventually become a $250 billion scales and 10% of private consumption by 2025. Among Indian brands, online-first brands gained a 30% share of e-commerce which will grow up to 45% by 2025. D2C and digital-native brands are now driving much of the e-commerce growth in India.
  • All this shows Indian consumption will depend on mobile and internet penetration.
  • 14) Social media: There were 448 million social media users in India in January 2021. The number of social media users in India increased by 78 million (+21%) between 2020 and 2021. The number of social media users in India was equivalent to 32.3% of the total population in January 2021. Many apparel brands has started giving ads on instagram to create awareness about their brands. India has total 140 million instagram users. Social media creates brand awareness among consumers.
  • 15) Mobile Connections in India: There were 1.10 billion mobile connections in India in January 2021. The number of mobile connections in India increased by 23 million (+2.1%) between January 2020 and January 2021.
  • The number of mobile connections in India in January 2021 was equivalent to 79% of the total population. Mobile and internet penetration will play a major role to create brand awareness which will lead to an increase in consumption of apparel.


ABFRL plans to more than double its consolidated revenue to about Rs 21,000 crore by FY 2026 from Rs 9,100 crore in FY2020. This represents a 15% CAGR over FY2020-FY2026. The company estimates growth from new businesses to be relatively faster at a CAGR of 32%.


Lifestyle Brands (Figures in Rs cr):

                   Year                  Revenue
                   2020                   4,800
                   2026                   9,000

Plans to Grow at CAGR of 11-12%

Pantaloons (Figures in Rs cr):

                  Year                  Revenue
                  2020                   3,650
                  2026                   8,500

Plans to grow at CAGR of 15-16%

New Businesses (inner wear, ethnic wear) (figures in Rs cr):

                   Year                 Revenue
                   2020                    870
                   2026                 4,500

Plans to grow at CAGR of 32%

Within the new businesses, revenue from the ethnic wear segment is expected to grow at a fast pace of 85% CAGR. ABFRL’s EBITDA is expected to increase by 3.4 times over FY 2020-FY2026 to about Rs 2,350 crore.

The contribution of lifestyle brands, pantaloons and new businesses stands at Rs 1,000 crore, Rs 900 crore and Rs 550 crore, respectively. New businesses are expected to swing to profit at the EBITDA level by FY 2026 with a margin of about 12%.

This is expected to be driven by strong performance from the inner wear and ethnic segment.

The new business posted an operating loss in FY 2020. The company’s target is to generate cumulative FCFF of Rs 2,000 crore (cash flows from operations of Rs 4,000-4,500 crore fewer than Rs 2,000-2,500 crore of CAPEX), which post interest costs and taxes would work out to just about Rs 1,000-1,300 crore of cumulative cash accretion over five year period.


  • 1) Sabyasachi: ABFRL has acquired a 51% stake in label run by Sabyasachi Couture for Rs 398 crore. The partnership firm will be engaged in the business of manufacturing, distribution, and sale of designer apparel, jewelry and accessories under its own brand Sabyasachi. The Sabyasachi brand has strong Indian roots and global appeal. It enjoys a strong franchise in India, the U.S, the U.K, and West Asia.
  • 2) Jaypore: ABFRL has acquired ethnic apparel and lifestyle retailer Jaypore for Rs 110 crore. Ethnic wear is the largest segment in the Indian fashion apparel market.
  • 3) TG apparel and Décor: ABFRL has acquired 100% shares of existing shareholders of TG apparel and décor private limited. TG apparel is a B2C entity which retails ethnic fashion both online and offline.
  • 4) Shantanu & Nikhil: ABFRL has acquired 51% stake in finesse international design, that runs bespoke apparel retail brand Shantanu & Nikhil for Rs 60 crore.
  • 5) Tarun Tahiliani: ABFRL has acquired 33.5% stake in goodview properties private limited, the company founded by designer Tarun Tahiliani, for Rs 67 crore. ABFRL and Tahiliani will also form new entity that will launch a contemporary men’s ethnic wear brand. ABFRL will hold 80% stake in the new entity while Tahiliani will hold the remaining 20%. The new brand, which will operate in the premium occasion wear segment at accessible price points, aims to build a Rs 500 crore business in the next five years with about 250 stores. The brand will roll out the first store by September. As part of the deal, ABFRL will also acquire 33% of the existing luxury couture business of Tahiliani, with the option to increase it to 51% in the next few years.


Walmart owned Flipkart has invested Rs 1,500 crore for a 7.8% stake in ABFRL. This transaction will help ABFRL to increase its penetration in E-commerce segment.

Big cities are contributing less to growth of India’s retail industry, as consumption patterns have changed over the last decade. A large group of smaller cities, including Surat, Jabalpur, Raipur, Mangalore and Faridabad have emerged as the growth centers with their own consumer preference. All retailers are expanding their businesses in Tier II and III cities.

To grab such opportunities Peter England brand from House of ABFRL has strengthens its network by launching its 300th exclusive outlet in small towns of India.

Dedicated to providing premium quality fashion at affordable prices to customers, Peter England is increasing its presence beyond metros, focusing on tier 3 and tier 4 markets.

Peter England now has an expansive footprint of over 1,000 store across the country.

It sells more than 14 million garments every year across 1,000 exclusive stores, 3,500+ multi-brand outlets, and across 800+ towns. Peter England has been voted as India’s most Trusted Apparel Brand for seven consecutive years by the Economic Times Brand Equity Survey.

ABFRL ranks 8th globally and 1st in Emerging markets & Asia as most sustainable company in the textiles, apparel and luxury goods for its ESG performance in the 2020 edition of S&P Global Corporate Sustainability Assessment.


Figures in Rs crores

Particulars FY16  FY17  FY18  FY19 FY20 (Comp- arable) FY20
Revenue  6,035  6,633  7,181  8,118  8,743 8,743
EBIDTA   405   476   501   619   518 1,290
EBIT    67   233   221   337   269   414
PBT  (110)    54    49   149    57   (9)
PAT  (110)    54   118   321   (79) (145)
Revenue Growth    9.9%   8.3%   13%   7.7%  7.7%
EBIDTA Growth  17.5%   5.4%  23.5% -59.9% 108.5%
EBIDTA%   6.7   7.2     7   7.6    5.9  14.8
EBIT%   1.1   3.5   3.1   4.1    3.1   4.7
PBT%  -1.8   0.8   0.7   1.8    0.6  -0.1
PAT%  -1.8   0.8   1.6    4   -0.9  -1.7
Capital employed  2,755  3,003 2,955  3,132  3,862  6,330
Return on average capital employed   2.4%  8.1%   7.4%  11.1%   7.7%  8.7%
Net Debt Equity Ratio      2    2.1   1.6   1.2    2.3   4.6

Revenue (Figures in Rs Crore)

                      Year                   Revenue
                     FY16                    6,035
                     FY17                    6,633
                     FY18                    7,181
                     FY19                    8,118
                     FY20                    8,743

EBITDA (Figures in Rs Crore)

                     Year                   EBITDA
                    FY16                      405
                    FY17                      476
                    FY18                      501
                    FY19                      619
                    FY20                      518

EBIT (Figures in Rs crore)

                   Year                      EBIT
                  FY16                        67
                  FY17                      233
                  FY18                      221
                  FY19                      337
                  FY20                      269

PAT (Figures in Rs Crore)

                   Year                      PAT
                  FY16                     -110
                  FY17                        54
                  FY18                      118
                  FY19                      321
                  FY20                     -79


                      Year                    ROACE
                     FY16                       2.4
                     FY17                       8.1
                     FY18                       7.4
                     FY19                     11.1
                     FY20                       7.7

In Q3 company saw a significant acceleration of business recovery. Company’s Q3FY21 sales were more than double of Q2FY21, recovered to 80% of last year.

The company’s revenue increased to Rs 2,076 crore in Q3 from Rs 1,028 crore in Q2. Company’s net profit increased to Rs 58 crore in Q3 from loss of Rs 188 crore in Q2.

Each of company’s segment posted an excellent performance:

  • 1) Lifestyle Brands: on the back of a strong festive and favorable wedding season, the business recovered to 80% of last year’s levels, with the retail channel recording 92% recovery. Improved gross margins and strong cost control measures drove a margin expansion of 140 bps.
  • 2) Pantaloons: Business recovered to 75% of pre-covid levels, reporting the highest ever EBITDA margins in the history of the company.
  • 3) Other Business: Inner wear and athleisure recorded 25% growth over the same quarter last year.

All these shows company has came back strongly even after the lockdown due to pandemic. In future also company will come back strongly under such bad pandemic circumstances.

Overview of Key performance indicators – Lifestyle brands:

Lifestyle Brands   FY16    FY17    FY18   FY19   FY20
Walk ins (crores)    0.83    0.79     0.82     0.79    0.70
% growth   -12    -11      -4      -5    -8
Conversion    44%     44%     46%     50%   55%
Average selling Price   1,582   1,639    1,747   1,714   1,626
Average bill Value   3,532   3,701    4,211   4,256   4,072
Items Per Bill    2.2     2.3     2.4     2.5    2.5
LTL Volume growth   -4%     -7%      8%      4%    3%
LTL ASP Growth     4%      2%     0%      1%     1%
LTL Growth Value     0%  -5.7%    8.6%    5.3%   4.5%

Overview of Key performance indicators – Pantaloons

Pantaloons   FY16   FY17   FY18   FY19   FY20
Walk ins (crores)    4.18    4.68   4.61    7.15    6.97
% growth      5      0     -9       5    -2.6
Conversion     22%     23%    23%      24%     25%
ASP    554     525    666     631     655
ABV   1820   1725   1799   1833   1993
Items per Bill    3.3     3.3     2.7     2.9     3.0
LTL Volume growth     9%     7%     -3%     18%     -2%
LTL ASP growth    -3%    -4%       1%     -3%      5%
LTL value growth    5.9%    3.3%    -2.6%   14.2%     2.7%

(Figures in Rs crore)

Particulars   March 31st,2020   March 31st, 2019
Net fixed assets (including cwip)              738              718
Right of use assets           2,174                –
Goodwill           1,860           1,860
Deferred tax asset             195              263
Investments             170               4
Net working Capital          1,193              286
Capital Employed          6,330           3,132
Net worth          1,086           1,429
Debt          2,776           1,703
Lease Liability          2,467                –

(Figures in Rs crore)

   ParticularsYear ended 31st March 2020 (as reported)Year ended 31st March 2021 (as comparable)Year ended 31st March 2020. Increased/(decreased)
Rent expense       487      1,247           (760)
Finance cost       423        212            210
Depreciation and amortization expense       877        249            628
Other income       65        52             13
Profit/(loss) before tax      (9)        57            (66)
        ParticularsAs at 31st March 2020As at 31st March 2019
Inventory            2,349            1,921
Trade Receivables             840              781
Cash and bank balances             265                57
Other assets         1,098           1,016
Less: Trade payables         2,273           2,397
Less: other liabilities         1,086           1,092
Net working capital         1,193              286
        ParticularsAs at 31st March 2020As at 31st March 2019
Debt Turnover ratio           10.79          12.18
Inventory Turnover ratio             4.09            4.49
Interest coverage ratio             1.27            1.80
Current ratio             0.73            0.83
Debt equity ratio             2.31            1.15
EBITDA Margin            14.8%            7.6%
Operating profit margin             4.7%            4.1%
Net Profit Margin           -1.7%            4.0%
Return on net worth           38.1%          23.6%
Return on average capital employed             8.7%          11.1%

The company’s income from operations increased to Rs 8,742.53 crore in FY 2020 from Rs 12.78 crore in FY 2011. From all this information, I’ll prefer to buy Aditya Birla Fashion Retail Limited at CMP of Rs 176.5 on 14th April 2021.

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Pritesh Patel

Pritesh Patel

The founder of Patel Securities, Pritesh loves to talk about Stocks, Businesses, and Sectors.
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