Aditya Birla Fashion and Retail (ABFRL) expects to exceed its own revenue target of Rs 21,000 crore by 2026, even as the firm is looking to strengthen its market position by leveraging technology and superior execution. “We had projected a revenue of Rs 21,000 crore for the year 2026 during our annual investor day held in March 2021. I am very confident that we will be able to surpass that target and set even higher milestones for the business going forward,” its chairman Kumar Mangalam Birla told shareholders at the company’s annual general meeting on Monday.
The company is also confident of fortifying its market position, leveraging technology and superior execution excellence to consistently “build a strong, profitable and future-ready brand portfolio,” he added. ABFRL posted revenues of Rs 8,136 crore for the financial year 2022, a 55% rise from Rs 5,249 crore posted during the year-ago period.
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This is despite the company losing “nearly one quarter” to the Covid Delta wave, as it registered a strong recovery in the subsequent quarters. As of FY22-end, most of its businesses have either come back or exceeded the pre-Covid levels.
“A robust budget and expense control mechanism complemented by a reduction in working capital, through inventory and payables management, led to the release of cash from operations. These actions have further strengthened your company’s balance sheet,” Birla said, adding the company’s net debt fell drastically to Rs 504 crore as on March 31, 2022.
“The strong revenue recovery resulted in improved profitability over the previous year. Several initiatives encompassing cost management, supply chain optimisation and smart procurement were taken up by the business teams that contributed to the sharp improvement in profitability. The business delivered more than Rs 500 crore in cost savings, on top of about Rs 1000 crore delivered in the previous year,” he said.
The company is also looking at expanding its ethnic portfolios in the Indian apparel industry, which was strengthened through acquisitions and partnerships. The Aditya Birla Group firm is also working on strategic alliances and building a comprehensive set of iconic brands.
In FY22, ABFRL launched a premium ethnic wear brand, Tasva, in partnership with Tarun Tahiliani. The brand, which opened six stores in FY22, is expected to add about 70 stores in FY23. In May this year, Singapore’s sovereign wealth fund GIC entered into a deal to acquire a 7.5% stake in ABFRL for Rs 2,195 crore.
“This investment from a marquee sovereign fund signals the strength of your company’s business model and its growth prospects.”
According to Birla, the global fashion industry was buffeted by the winds of disruption due to the pandemic. “Here in India, the disruption caused by the first wave of Covid was further exacerbated by an even stronger second wave in 2021. And this resulted in significant value destruction across the entire apparel industry,” he added.