Aditya Birla Fashion shares drop 2% as Citi maintains ‘Sell’ rating with target price of Rs 260

Shares of Aditya Birla Fashion and Retail Ltd (AB Fashion) fell 2% after Citi reaffirmed its ‘Sell’ rating, setting a target price of ₹260 per share. As of 10:13 AM, the shares were tarding 1.61% lower at Rs 259.75.

Citi’s Outlook on AB Fashion

Citi acknowledges AB Fashion’s focus on profitability over aggressive expansion, considering it a prudent strategy. However, the brokerage warns that this approach may curb near-term growth, especially in a weak demand environment.

The company has ruled out mergers, acquisitions, or fundraising for the next 5–7 years. Instead, it aims to achieve a revenue CAGR of over 11% through FY24–30 and an EBITDA margin exceeding 11%. Additionally, AB Fashion plans to become debt-free within 2–3 years.

Despite its long-term growth strategy, Citi remains cautious about high operating and financial leverage and a lack of visible demand recovery. The demerged ABFRL business is expected to see 19%+ revenue CAGR, margin expansion above 7%, and positive free cash flow by FY29.

However, in the short to medium term, Citi highlights that these factors could weigh on AB Fashion’s stock performance, making it a challenging bet for investors.

Aditya Birla Fashion & Retail shares opened at ₹263.50, hitting a high of ₹264.00 before slipping to ₹257.80. The stock remains below its 52-week high of ₹364.40 but above its 52-week low of ₹225.50.

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