Aditya Birla Fashion and Retail Ltd

Issue Overview

• Rights Issue of equity shares; Preferential Issue of equity shares.
• No revision or undersubscription reported; utilization aligned with documents.
• Preferential objects: prepayment/repayment of borrowings; capex/opex; general corporate purposes.

Utilisation of Proceeds

• Rights issue proceeds utilized per offer document; no deviations observed.
• Prepayment of borrowings: majority utilized; completion in Q1 FY27.
• Capex/opex across high-growth businesses: substantial utilization; completion in Q1 FY27.
• General corporate purposes: utilized; on schedule.
• Unutilised proceeds parked in monitoring account; 0.08 crores.

Governance and Compliance

• Shareholder approvals for material deviations not applicable; approvals aligned.
• No material events or information affecting viability reported.
• Monitoring agency disclosures: no conflicts of interest; report not audit; relies on issuer representations.

General Corporate Purpose (GCP)

• GCP utilisation for working capital across four quarters totaling 593.75 crores.

Financial highlights

• Revenue: Rs 2,026 crore for Q1 FY27, up 11% YoY.
• EBITDA: Rs 167 crore; margin 8.2%, down from LY due to lower other income.
• PBT: Rs -320 crore for Q1 FY27; vs Rs -260 crore LY.
• PAT: Rs -249 crore for Q1 FY27; vs Rs -234 crore LY.

Segment performance and expansion

• Pantaloons revenue Rs 1,204 crore, up 10% YoY.
• OWND grew 55% YoY led by store additions.
• TCMB luxury portfolio delivered double-digit LTL growth.
• TMRW delivered 11% YoY growth; offline contribution >15%.
• Ethnic brands posted 5% LTL growth in shortened wedding period.
• Added 45+ new stores, total retail footprint beyond 7.9 million sq ft.
• End of quarter: 399 Pantaloons stores and 88 OWND stores.

Outlook and strategy

• Focus on measured expansion, cost optimization, and calibrated pricing to protect profitability.

Business Overview

• ABFRL runs Pantaloons, Ethnic, TMRW, Luxury, and The Collective & Mono (TCMB) brands.
• Omni-channel focus with offline expansion and Galeries Lafayette rollout.
• Q1 FY27 signals continued growth momentum across Pantaloons, Ethnic, Luxury, and TMRW.

Operational Highlights

• Market dynamics show occasion-led demand moderation and input cost pressures.
• 45+ stores added, ~70k net new retail area; footprint >7.9 mn sq ft.
• Pantaloons revenue 1204 Cr, up 10% YoY; LTL 4%.
• TMRW revenue 220 Cr, up 11%; losses narrowed.
• Ethnic revenue 454 Cr, up 4%; Ethnic EBITDA margin ~0.1%.
• Luxury segment revenue grew 30% YoY; Galeries Lafayette ramp.
• OWND grew 55% YoY; 10 new stores; OWND now in 88 stores.
• E-commerce revenue up 37% YoY; online contribution ~5%.

Financial Performance

• Revenue Rs 2026 Cr; up 11% YoY.
• EBITDA Rs 167 Cr; margin 8.2%.
• PAT Rs -249 Cr; net loss widened.
• PBT Rs -320 Cr; Tax Rs -72 Cr.
• Total expenses Rs 2395 Cr; material costs and purchases rose.

Capital Structure & Liquidity

• No debt/equity changes disclosed in this update.

Strategic Priorities & Outlook

• Continue omni-channel expansion, OWND and Galeries Lafayette ramp.
• Strengthen ethnic and luxury portfolios; accelerate online and offline mix.
• Multi-channel beauty expansion; online revenue growth and contribution.

Risks & Mitigation

• Inflationary cost pressures in raw materials, logistics, and wages.
• Intensified competition in lower-tier markets; broader assortments to gain share.

Governance & Leadership

• Board approved unaudited Q1 FY27 standalone and consolidated results.

Sabya India corporate action

• Board approved corporatization of Sabyasachi Calcutta LLP into Sabyasachi India Limited, forming a subsidiary.
• ABFRL to invest ~₹5.10 crore for ~51% equity in Sabya India; remaining 49% held by partners.
• Partners to infuse ~₹10 crore into Sabya India, in proportion 51:49.
• Sabya India is a newly incorporated entity (July 16, 2026) and yet to commence business.
• No related party transactions; acquisition not requiring promoter/group approvals.
• Indicative completion timeline to be completed in ~15 days.
• Consideration will be cash remittance through normal banking channels.
• ABFRL will hold ~51% post-transaction in Sabya India.
• Industry focus: apparel, beauty, jewellery and accessories.
• Regulatory approvals: none required for the acquisition.

ESOP Scheme 2026 approval

• Board approved ABFRL ESOP Scheme 2026 at August 8, 2026 meeting, subject to member approval.
• Aggregate options proposed: not exercisable into more than 3,12,95,000 equity shares (~2.5% diluted).
• Total shares covered under these options: 3,12,95,000.
• Exercise price: not less than face value and not exceed fair market value on grant date.
• Options exercisable within five years from vesting, subject to terms and taxes.
• NRC to administer the scheme as Compensation Committee.
• Implementation to be through issuance of new equity shares.
• Eligibility criteria set; minimum one-year gap between grant and vesting.
• Final adoption to require member approval.

Financial results

• Unaudited standalone and consolidated results for quarter ended June 30, 2026 approved.
• Comparatives restated for June 30, 2025 and March 31, 2026.

Amalgamation and corporate actions

• Scheme of amalgamation of Jaypore E-commerce Private Ltd and TG Apparel & Decor Private Limited approved by NCLT.
• Amalgamation effective August 1, 2026; restatement in standalone results.
• NCLT order dated July 2, 2026; ROC filing July 10, 2026; subsidiaries dissolved without winding up.
• Rights issue of 3,65,19,197 equity shares aggregating to 175 crore; ICRPL stake to 89.29%.
• Subscription completed on May 20, 2026.
• ESOP allotment: 26,267 equity shares allotted on June 30, 2026.

Auditor remarks and governance timing

• Auditors' conclusions not modified despite amalgamation-related restatements.
• Trading window closed for 48 hours post-announcement.

Overview

• Consolidated BRSR for FY2025-26 covering ABFRL's operations.
• Main activities: design, manufacturing, distribution and retail of branded apparel.
• Reporting boundary is consolidated, including offices, factories, warehouses and stores.
• Turnover split: 26.35% manufacturing, 73.65% retail; exports 1.04%.
• Geographic scope: India across 28 states/4 union territories; USA export market.
• Independent assurance by British Standards Institution for BRSR; integrated with Annual Report.

Key ESG Risks & Opportunities

• Risks include supply-chain human rights, child/forced labor, data privacy, and regulatory compliance.
• Opportunities include 95% products with sustainable attributes and 2030 renewable energy targets.
• Vendor Code of Conduct coverage for all tier-1 suppliers by 2030.

Governance & Policy Highlights

• Chief Sustainability Officer oversees ESG with board-approved anti-bribery, whistleblower, human rights, POSH, and environmental policies.
• Independent BRSR assurance provided by British Standards Institution; boundary is consolidated.
• Environmental policy and vendor conduct standards accessible on ABFRL website.
• Vendor Code of Conduct Program covers tier-1 suppliers by 2030.
• No material penalties reported; governance risk oversight reviewed by Board.

Social Responsibility & Workforce

• 100% of employees and permanent workers covered under performance and career development reviews.
• Premises accessible to differently abled employees per Disability Act.
• Grievance mechanisms exist: works committee for permanent workers (20% male, 80% female).
• CSR focuses on Education, Health & Sanitation, Sustainable Livelihood, Water and Digitization.
• Shareholders (21), employees/workers (356), and customers (68,550) filed complaints in FY2025-26.

Environmental Performance

• Zero liquid discharge mechanism implemented across ABFRL facilities.
• 50% renewable energy target by 2030; PV rooftop and biomass usage to achieve it.
• 95% inputs have at least one sustainable attribute.
• Carton packaging uses 100% recycled cardboard.
• 30 critical vendors assessed for environmental impacts.

Stakeholder Engagement & Complaints

• Key stakeholder groups include communities, investors, shareholders, employees, and customers.
• Grievance policy accessible on ABFRL website; mechanism in place.
• FY2025-26 complaints: shareholders 21; employees 356; customers 68,550.
• No significant unresolved complaints from communities or value chain partners.

Other Notable Metrics

• Product information framework: 95% of products with sustainable attributes; tags explain safe usage.
• Product recalls: none; data privacy: 0 data breaches.
• Information on products and services available on ABFRL website; brands have individual sites.
• Certifications include USGBC and IGBC.
• Cybersecurity policy exists; no data breaches in FY2025-26.

Key highlights

• Consolidated revenue from operations ₹8,176.92 crore; total income ₹8,486.53 crore.
• Net loss after tax ₹829.89 crore; EPS -₹6.38 (basic/diluted).
• No dividend declared in the year.
• End-year cash ₹66.96 crore.
• Undrawn facilities ₹1,174.82 crore.
• QIP 2025 raised ₹1,860.66 crore.
• Madura Lifestyle Fashion demerger to AB Lifestyle Brands effective May 1, 2025.
• Jaypore E-commerce and TG Apparel amalgamated; NCLT order April 6, 2026.
• Discontinued Madura Fashion & Lifestyle segment revenue ₹7,618.62 crore.