Detailed Narrative
Q4 FY26 Performance Overview
Aditya Birla Lifestyle Brands (ABLBL) reported a strong Q4 FY26, with consolidated revenue growing 12% YoY to INR 2,174 crores. EBITDA increased by 14% YoY to INR 375 crores, leading to a 20 bps expansion in EBITDA margin to 17.2%. Normalized PAT saw a significant 58% YoY growth, reaching INR 60 crores, despite consumer sentiment moderation towards the end of the quarter due to geopolitical uncertainties and a softer wedding calendar.
Full-Year FY26 Financial Highlights
For the full fiscal year FY26, ABLBL's revenue grew 7% YoY to INR 8,396 crores. EBITDA for the year was up 13% to INR 1,429 crores, with the EBITDA margin improving by 90 bps to 17%. Normalized PAT for the 12 months stood at INR 209 crores, a 61% increase YoY, which includes higher depreciation of INR 40 crores due to aggressive store expansion. The company generated operating cash flow of INR 450 crores before CAPEX and security deposit.
Segmental Performance: Lifestyle Brands
The Lifestyle Brands segment delivered an 11% YoY revenue growth in Q4 FY26, reaching INR 1,829 crores, with an EBITDA margin of 20%. For the full year, Lifestyle Brands recorded INR 7,154 crores in revenue and an 8% like-to-like growth, with its EBITDA margin at 19.6%, 20 bps higher than the previous year. Management noted that while H1 FY26 was impacted by e-commerce rationalization, the last two quarters showed double-digit growth.
Segmental Performance: Emerging Business
The Emerging Business portfolio, comprising Reebok, Van Heusen Innerwear, and American Eagle, saw an 18% YoY revenue growth in Q4 FY26. Reebok, in particular, delivered a 30% growth during the quarter, and its full-year sales have more than doubled since acquisition. The segment's profitability improved by 420 basis points YoY in FY26, with the EBITDA margin reaching nearly 4% from almost breakeven last year. Van Heusen Innerwear also recorded double-digit overall growth and is on track to achieve at least one profitable quarter in FY27.
Store Expansion and CAPEX Plans
ABLBL's footprint expanded to 3,348 stores across 4.9 million square feet in nearly 800 cities and towns by the end of FY26, with over 300 new stores added during the year. The company plans to continue aggressive expansion, targeting approximately INR 300 crores in CAPEX for FY27. Of this, about INR 200 crores will be allocated to retail expansion, with 40-50 new Reebok stores planned annually for the next few years. Store closures are expected to be lower this year compared to last, leading to stronger net expansion.
Capital Structure and Shareholder Returns
Net debt at year-end FY26 stood at INR 726 crores, down from INR 781 crores in March last year. The company aims to be debt-free within the next three years, though a reasonable level of debt is considered healthy. The Board declared a dividend of INR 0.50 per equity share, aligning with a policy to pay dividends broadly in the range of 15% to 25% of net profit, demonstrating confidence in cash flow generation.
One-time PLI Benefit and Cost Management
Q4 FY26 results included a one-time📎 PLI benefit of approximately INR 20 crores, which was accounted for in the financials due to the subsidiary achieving targets related to a new factory. This benefit compensated for initial costs incurred during the factory setup. Management is actively monitoring the impact of crude derivative prices on polyester costs and inflation, implementing strategies to mitigate these impacts through sourcing and agile operations.