Aditya Birla Lifestyle Brands Limited — Q4 FY26 earnings call

Call held 8 May 2026

Management summary

ABLBL delivered a strong Q4 FY26, with revenue growing 12% YoY to INR 2,174 crores and EBITDA up 14% to INR 375 crores, driven by robust performance across Lifestyle and Emerging Brands. Full-year FY26 saw 7% revenue growth and 13% EBITDA growth, with margin expansion. The company announced a dividend of INR 0.50 per share and plans continued aggressive store expansion, targeting approximately INR 300 crores in CAPEX for the next fiscal year, while aiming for working capital efficiency.

Highlights

  • Q4 FY26 revenue grew 12% YoY to INR 2,174 crores, driven by strong performance across brands and channels.

  • Consolidated EBITDA for Q4 FY26 was up 14% to INR 375 crores, with EBITDA margin expanding by 20 bps to 17.2%.

  • Normalized PAT for Q4 FY26 grew 58% YoY to INR 60 crores.

  • Emerging Business segments grew 18% YoY in Q4 FY26, with Reebok delivering 30% growth.

  • The company declared a dividend of INR 0.50 per equity share within the first year post-demerger.

Concerns

  • Q4 FY26 reported PAT of INR 55 crores includes a one-time exceptional item pertaining to labor code impact.

  • Consumer sentiment moderated towards the latter part of Q4 FY26 due to geopolitical uncertainties and heightened market volatility.

  • Softer wedding calendar compared to last year contributed to uneven wedding-led demand in Q4 FY26.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹2,174 Cr
    YoY +12%
  • Consolidated EBITDA
    ₹375 Cr
    YoY +14%
  • EBITDA Margin
    17.2%
    YoY +0.2%
  • Normalized PAT
    ₹60 Cr
    YoY +58%

FY26

  • Revenue
    ₹8,396 Cr
    YoY +7%
  • EBITDA
    ₹1,429 Cr
    YoY +13%
  • EBITDA Margin
    17%
    YoY +0.9%
  • Normalized PAT
    ₹209 Cr
    YoY +61%

What they filed

Q1 FY27: revenue up 11.4%, net profit up 47.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,962 2,130 1,942 1,840 2,037 +4%2,341 +10%2,154 +11%2,049 +11%
EBITDA282 332 307 260 312 +11%405 +22%311 +1%307 +18%
Net profit-56 61 43 21 23 +141%66 +8%24 −44%31 +48%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentQ4 FY26 YoY GrowthFY26 EBITDA Margin
Lifestyle Brands11%19.6%
Emerging Business18%4%

Capital allocation

high confidence
  • Capex ₹300 Cr
    • Retail expansion (out of total CAPEX) ₹200 Cr
    • Routine CAPEX (repairs, etc.) ₹50 Cr
    • Manufacturing CAPEX (line expansion, upgradation, technology enhancements)
    Vishak Kumar: "About INR 300 crores. So, we will continue with that kind of momentum. There is still a lot of growth opportunities in the market, so we will continue to drive that." and "So, to answer your question very directly and simply, out of, say, INR 300 crores of CAPEX, about INR 200 crores would go into retail expansion."
  • Debt Net ₹726 Cr
    Dharmendra Lodha: "Net debt at year-end stood at INR 726 crores versus INR 781 crores in March last year."
  • Dividend ₹0.5/share (interim)
    Dharmendra Lodha: "The Board of the company has also declared a dividend of INR 50 paisa per equity share within the first year of the company post-demerger."
  • Liquidity Liquidity disclosed The company generated operating cash flow (before CAPEX and security deposit) of INR 450 crores in FY26, a large share of which funded aggressive store expansion.
    Dharmendra Lodha: "Through business operations, the company generated operating cash flow (before CAPEX and security deposit) of INR 450 crores. A large share of this cash has gone towards funding aggressive store expansion during the year."

Guidance & targets

Dividend

  • Dividend Payout Ratio Dividend · ongoing · Medium confidence 15% to 25% of net profit
    Ashish Dikshit: "But we want to indicate that we feel very confident about the cash flow generations of this company to be able to pay dividend broadly in the range of close to 15% to 25% of net profit."

    — Ashish Dikshit

Debt

  • Debt-free status Debt · next three years · Medium confidence Debt-free
    Ashish Dikshit: "And as far as the debt repayment is concerned. ideally that this cash flow should make company debt-free in the next three years."

    — Ashish Dikshit

Store Expansion

  • Reebok Store Additions Store Expansion · next few years · High confidence 40-50 stores per year
    Vishak Kumar: "Network expansion will continue. 40-50 stores per year for the next few years should be par for course, unless we do more than that."

    — Vishak Kumar

Capex

  • Overall CAPEX Capex · FY27 · High confidence INR 300 crores
    Vishak Kumar: "About INR 300 crores. So, we will continue with that kind of momentum."

    — Vishak Kumar

Growth

  • Lifestyle Business Like-to-like Growth Growth · steady state · Medium confidence about 7%
    Vishak Kumar: "I think that momentum should continue for the business, and there are enough initiatives in place to be able to drive that. There will be some higher quarters and some lower quarters, but by and large, that's what we are driving here."

    — Vishak Kumar

Store Closures

  • Store Closure Rate Store Closures · ongoing · Medium confidence 3% to 5%
    Vishak Kumar: "So, my sense is 3% to 5% store closures depending on different brands and different contexts. Would be a fair expectation."

    — Vishak Kumar

Profitability

  • Emerging Business EBITDA Margin Profitability · quarters ahead · Medium confidence keep improving

    From nearly 4% today

    Vishak Kumar: "This number should keep improving over the quarters ahead, Niharika."

    — Vishak Kumar

  • Van Heusen Innerwear Profitable Quarters Profitability · FY27 · Medium confidence at least one profitable quarter
    Vishak Kumar: "I did say that I hope to have at least one profitable quarter in FY27."

    — Vishak Kumar

What to watch in Q1 FY27

Working Capital Efficiency

this year (FY27)
Current Some pre-produced inventory from new manufacturing capacity
Target Release of working capital by tightening operations

Why it matters

Improvement in working capital management will free up cash for the company.

Vishak Kumar: "So, part of our goals of this year is to be able to tighten that so that we are able to release more cash."

Risks & concerns

  • Consumer sentiment moderation

    medium

    Consumer sentiment moderated towards the latter part of Q4 FY26 due to geopolitical uncertainties and heightened market volatility.

    Management acknowledged

  • Crude derivative impact on polyester costs

    medium

    Crude prices have an impact on polyester, which is used in many product categories, and sourcing teams are working to mitigate cost increases.

    Analyst acknowledged

  • Inflation impact on margins

    medium

    Potential for crude oil and other inflationary pressures to impact margins in initial quarters, requiring careful monitoring.

    Analyst acknowledged

  • Softer wedding calendar

    low

    Wedding-led demand was uneven in Q4 FY26 due to a softer wedding calendar compared to last year.

    Management acknowledged

  • Continuous store closures

    low

    Store closures are a continuous phenomenon, with an expected rate of 3% to 5% depending on brands and contexts, as locations can become irrelevant over time.

    Management acknowledged

Q&A highlights

7 direct
High growth in 'others' portion of Lifestyle Brands channel performance Direct
Vishak Kumar: "Beyond the channel businesses, we also have a contract manufacturing business, which we use to export to brands across the world. That has also had a good run during the year. We added a new large factory, so we have been able to create additional capacity, manufacturing capacity, and we were able to put that to good use with the growth in contract manufacturing.

Clarified that the high growth in 'others' was primarily due to contract manufacturing and institutional business, not just e-commerce, and was aided by new factory capacity.

Asked by Sameer Gupta

Impact of crude derivative on costs and pricing power Partial
Vishak Kumar: "But if you want me to answer that, I think the simple answer is yes. There is a correlation in prices, so our sourcing teams are constantly looking at ways to mitigate impacts of any cost increases. We will continue to do that. But simple answer, yes, crude has an impact on polyester.

Acknowledged the impact of crude prices on polyester costs, which affects their modern handwriting product categories, but stated they are actively mitigating it.

Asked by Abhijeet Kundu

Subsidiary profitability (PLI benefits) and its impact on Lifestyle margin Direct
Dharmendra Lodha: "These are one-time PLI benefits which we have accounted in the financials. Our subsidiary is eligible for the PLI and we have achieved those targets. So, that's a one-time benefit.

Revealed that a portion of the Q4 profitability, specifically about INR 20 crores, was due to one-time PLI benefits from a new factory, suggesting a need to adjust Lifestyle business margins for this one-off item for true comparison.

Asked by Devanshu Bansal

Lifestyle segment growth vs peers and return to double-digit growth Direct
Vishak Kumar: "Yes, I think so, Devanshu. And just to give it a little more logic, if you look at last two quarters, we have been at double-digit growth in the Lifestyle business. It was H1 actually where some of the impact on e-com rationalization had happened.

Addressed concerns about Lifestyle segment's single-digit growth compared to peers, explaining that H1 was impacted by e-commerce rationalization, and the last two quarters have shown double-digit growth, indicating a return to stronger momentum.

Asked by Devanshu Bansal

Capital allocation, debt reduction vs growth Direct
Vishak Kumar: "So, first things first, Jignanshu. I think our debts are fairly within norms as a business. Having said that, I think this will be a business which will continue to generate cash, even stronger cash flows over the years, and you should expect that. Even after investing into growth, we should be able to generate cash.

Management reiterated their commitment to generating strong cash flows and balancing growth investments with debt reduction, aiming to be debt-free in three years but not at the expense of growth.

Asked by Jignanshu Gor

PLI scheme (INR 20 crores) - annual number, trajectory Direct
Vishak Kumar: "Ankit, let me explain this. So, first things first, it was a one-off. Okay. You don't get this again and again. Having said that, does it, hence, mean that next few quarters will have a negative impact? It won't. Because we took the hard knocks in the previous quarter.

Clarified that the INR 20 crores PLI benefit was a one-off for Q4 FY26, compensating for initial costs incurred during new factory setup, and will not recur in future quarters.

Asked by Ankit Kedia

Reebok growth sustainability (industry vs brand-specific) Direct
Vishak Kumar: "So, Rohan, if you look at steady state or at least last one year. Of course, first of all, brand has been on a very strong growth wicket in the last three years. Since we have taken over the brand three years back, it's almost doubled in size.

Management asserted that Reebok's strong growth is driven by brand-specific factors and significant white space opportunity, not just broader industry recovery, and they expect to grow faster than the industry.

Asked by Rohan Kampani

Van Heusen Innerwear breakeven levers Direct
Vishak Kumar: "A lot of our improvements have come by significant improvements in space productivity, retail productivity, per-door productivity, and so on, which is fueling growth. We have also made significant gains across e-commerce and department stores beyond the usual wholesale trade that we are into.

Detailed the operational levers driving Van Heusen Innerwear's path to profitability, including improved space and retail productivity, and gains in e-commerce and departmental stores.

Asked by Rohan Kampani

3 min read 7 chapters

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.

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