Aditya Birla Fashion stitches a ₹500-crore turnaround plan

Mumbai: Aditya Birla Fashion and Retail (ABFRL) said it will incur capital expenditure of ₹500 crore in 2025-26 and turn around loss-making businesses including TCNS Clothing, which owns women’s ethnic brand W, and digital to consumer entity TMRW, for which it will also raise funds.

ABFRL, which now owns brands including Pantaloons, Sabyasachi and Collective, reported net sales of ₹7,355 crore with net loss of ₹624 crore for 2024-25. It has demerged its lifestyle division, formerly known as Madura Fashion, into a new entity Aditya Birla Lifestyle Brands (ABLBL), which is likely to list on the stock exchanges at the end of June.

“The largest uptake in margins will come from turning the businesses which are currently negative Ebitda and taking away from the profitability, notably parts of ethnic businesses, TCNS being the largest, Tasva being the second, and TMRW being the other businesses. These are businesses which are actually suppressing the margins that other profitable businesses make,” Ashish Dikshit, managing director of Aditya Birla Fashion & Retail, told investors.

He said that excluding TMRW, the group will be Ebitda positive next year. “All other businesses, together, would be profitable next year and independently every business will achieve profitability by FY27. TMRW is the only business that could take a year more.”

With more than ₹2,350 crore of gross cash at consolidated level following the recent fundraising, the company said it will pursue aggressive growth to triple in scale and double in profitability over the next five years. The expansion spree comes at a time when consumers are tightening their spending across discretionary products.

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Retailers saw an average sales growth of 4% in April, lower than 6% in the previous month, according to the Retailers Association of India, indicating subdued single-digit growth for more than a year. “We can’t say the underlying demand is very different. There were wedding dates last quarter and therefore the wedding part of the business on those days had the benefit… was different on those dates. But that doesn’t reflect the underlying state of the economy and consumption situation,” Dikshit said.

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