Driven by moderate debt load, negative free cash flow, the company is currently loss-making.
In simple words: The company is currently losing money, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.
Decision support, not a buy or sell call.
As of 18 Oct 2026, 6:07 pm
Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.
The 60-second version of Aditya Birla Fashion and Retail Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Aditya Birla Fashion and Retail Limited manufactures, distributes, and retails fashion apparel and accessories in India and internationally. It operates through Pantaloons and Ethnic & Others segments.
IndustryApparel Manufacturing
SectorConsumer Cyclical
Employees14,725
Annual revenue₹8,140 Cr
How does it make money?
Turns over ₹8,140 Cr a year. Of every ₹100 of sales, about ₹-10 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 14,725 employees supports ₹55.3 lakh of revenue a year, the signature of a people-led business.
EBITDA margin8.8%
Net margin-9.5%
Revenue / employee₹55.3 lakh
Who are its competitors?
The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.
MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%
TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%
TRENT LTDP/E 87.2x · ROE 25.9%
AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%
What is its competitive advantage?Little sign of one
Returns on capital of -3.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.
ROCE-3.2%
ROE-13.3%
Peer median ROE25.9%
What is the outlook?
12 analysts covering the stock expect revenue to grow about 13.6% and earnings to fall about 195.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.
Est. revenue growth+13.6%
Est. earnings growth-195.3%
Analysts12
What has been driving growth?
Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -34% while net margin moved +3173% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.
Revenue effect-34%
Margin effect+3173%
DalalBaazaar Score
30/ 100
Weak
Weighted across six categories. Every point is explained below.
✗ Revenue has contracted at 13.0% a year
✗ Profit fell 106.5% in the latest year
Quality vs. Valuation
Company Quality
24/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
36/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
Weak on business quality and not cheap enough to compensate.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
No P/E — the company is lossmaking
P/E (Trailing)
Not meaningful
P/B
0.94x
EV/EBITDA
16.1x
PEG
—
Dividend Yield
None
What's Good / What's Bad
🟢 What's Going Well0
Nothing stands out as clearly improving on the years of data available.
🔴 What Needs Attention4
Margins are compressing
EBITDA margin has slipped from 12.3% to 8.8% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from -1.1% to -13.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 3.9% to -3.2% — often a sign of competition or overexpansion.
Red Flags
6 items require attention · 2 high · 4 watch
🔴Thin interest coverageFinancial
Operating profit covers interest only -0.8x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹776 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -0.3x to -0.8x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹348 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 3.5 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 29% over 3 years — each existing share owns a smaller slice of the company.
Investment Thesis
🟢 Bull CaseWhat could make this work?
No clear supporting case emerges from the available numbers.
🔴 Bear CaseWhat could go wrong?
Margins are being competed away
EBITDA margin has fallen from 12.3% to 8.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 8.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from -1.1% to -13.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today
1EBITDA margin holds above 7%✓ 8.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 8.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹348 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ -0.8x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ -3.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
Investment Checklist
5 / 12 checks passed
✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish
Price history
Quick Metrics
2 good · 3 neutral · 6 weak
Market Cap
₹5,460 Cr
Small Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
0.94x
Reasonable
Reasonable against the company's book value
EPS (TTM)
₹-3.97
Loss-making
Negative earnings per share — the business is losing money
ROE
-13.3%
Weak
Weak capital efficiency
ROCE
-3.2%
Weak
Low return on total capital employed
Debt/Equity
0.99x
Moderate
Moderate leverage
Revenue Growth (YoY)
10.6%
Healthy
Healthy top-line growth
Profit Growth (YoY)
-106.5%
Falling
Profits are shrinking
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
-₹348 Cr
Cash burning
Spending more cash than the operations bring in
More Metrics
CMP
₹44.87
P/E (Forward)
-7.6x
Operating Margin
-11.5%
Weak
Thin margins leave little room for error
Net Margin
-9.3%
Weak
Very little revenue reaches the bottom line
Current Ratio
1.25
Comfortable
Healthy short-term liquidity
Beta (vs Nifty)
0.07
Defensive
Steadier than the market
52W Range Position
4%
Near low
Near its 52-week low
Technical Snapshot
SMA 20 / SMA 50
46.2 / 51.0
Bearish alignment (short < long)
Price vs SMA 200
Below
Long-term downtrend
RSI (14)
31.4
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹12,363 Cr
₹6,385 Cr
₹7,309 Cr
₹8,140 Cr
-13.0%
EBITDA
₹1,526 Cr
₹1,052 Cr
₹679 Cr
₹719 Cr
-22.2%
EBITDA Margin
12.3%
16.5%
9.3%
8.8%
—
PAT (Net Profit)
-₹36 Cr
-₹628 Cr
-₹376 Cr
-₹776 Cr
—
EPS
₹-0.38
₹-6.52
₹-3.53
₹-6.38
—
ROE
-1.1%
-15.6%
-5.5%
-13.3%
—
ROCE
3.9%
-3.6%
-1.3%
-3.2%
—
Total Debt
₹6,572 Cr
₹9,450 Cr
₹5,016 Cr
₹6,188 Cr
-2.0%
Free Cash Flow
-₹45 Cr
₹594 Cr
₹1,047 Cr
-₹348 Cr
—
🔴 Revenue has shrunk at 13.0% a year over 3 years.
🔴 EBITDA has shrunk at 22.2% a year over 3 years.
🔴 EBITDA Margin has fallen from 12.3% to 8.8% over 3 years (-3.5 pts).
🔴 ROE has fallen from -1.1% to -13.3% over 3 years (-12.2 pts).
🔴 ROCE has fallen from 3.9% to -3.2% over 3 years (-7.1 pts).
🟡 Total Debt has been broadly flat over 3 years (-2.0% a year).
🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.
🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.
Watch Items
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
DalalBaazaar Thesis
🔴Business QualityWeak4.7/20
🔴Financial HealthStretched8.4/20
🔴GrowthWeak2.4/20
🔴ProfitabilityWeak2.5/15
🟡ValuationFair7.1/15
🟡RiskModerate4.5/10
Weak on the fundamentals
Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.
