Stock Performance and Market Context
On the day the new low was recorded, the stock experienced a sharp intraday fall of 4.01%, closing at Rs 65.12. This decline contributed to a two-day consecutive loss period, during which the stock shed 8.02% in returns. The day’s performance also lagged behind the Garments & Apparels sector by 1.57%, signalling relative weakness within its industry group.
Aditya Birla Fashion & Retail Ltd is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a sustained bearish trend. This technical positioning underscores the stock’s downward momentum over recent months.
The broader market environment has also been challenging. The Sensex opened 385.82 points lower and closed down by 240.32 points at 81,554.33, a 0.76% decline. The index has been on a three-week losing streak, falling 4.91% over this period. While the Sensex trades below its 50-day moving average, the 50DMA remains above the 200DMA, suggesting some underlying resilience in the benchmark despite recent losses.
Long-Term and Recent Financial Performance
Over the past year, Aditya Birla Fashion & Retail Ltd’s stock has delivered a negative return of 28.21%, in stark contrast to the Sensex’s positive 7.54% gain over the same period. The stock’s 52-week high was Rs 104.60, highlighting the extent of the decline from its peak.
Fundamental metrics reveal challenges in the company’s financial performance. The average Return on Capital Employed (ROCE) stands at a modest 2.09%, reflecting limited efficiency in generating returns from invested capital. Net sales have grown at an annualised rate of 6.05% over the last five years, while operating profit has increased by only 4.64% annually, indicating subdued growth in both top-line and profitability.
Debt servicing capacity is a notable concern, with a high Debt to EBITDA ratio of 6.31 times. This elevated leverage ratio suggests increased financial risk and pressure on cash flows to meet debt obligations.
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Recent Quarterly Results and Profitability Metrics
The company reported negative Profit Before Tax (PBT) excluding other income for the quarter ended September 2025, amounting to a loss of Rs 387.60 crores, a decline of 32.93% compared to the previous period. Operating profit to interest coverage ratio for the quarter was at a low 0.55 times, indicating limited ability to cover interest expenses from operating earnings.
Quarterly PBDIT stood at Rs 68.81 crores, marking the lowest level recorded recently. These figures highlight the pressure on profitability and the challenges in maintaining operational earnings sufficient to meet financial costs.
Valuation and Risk Considerations
The stock is currently rated with a Mojo Score of 3.0 and a Mojo Grade of Strong Sell, an upgrade in severity from the previous Sell rating issued on 23 Oct 2025. The Market Cap Grade is 3, reflecting moderate market capitalisation relative to peers.
Aditya Birla Fashion & Retail Ltd’s valuation appears stretched relative to its historical averages, with the stock trading at levels that imply increased risk. Despite the negative return of 28.21% over the past year, the company’s profits have only marginally increased by 2.2%, underscoring a disconnect between earnings growth and stock price performance.
Long-term performance has also been below par, with the stock underperforming the BSE500 index over the last three years, one year, and three months, signalling persistent challenges in delivering shareholder value.
Shareholding and Institutional Interest
Institutional investors hold a significant stake of 26.7% in the company. This level of institutional ownership suggests that entities with substantial analytical resources maintain exposure to the stock, reflecting their assessment of the company’s fundamentals and prospects.
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Summary of Key Metrics
To summarise, Aditya Birla Fashion & Retail Ltd’s stock has reached a new 52-week low of Rs 65.12, reflecting a combination of subdued financial performance, elevated leverage, and broader market pressures. The company’s average ROCE of 2.09%, modest sales and operating profit growth rates, and high Debt to EBITDA ratio of 6.31 times contribute to the cautious outlook embedded in its current valuation.
Recent quarterly results further highlight the strain on profitability, with negative PBT excluding other income and low interest coverage ratios. The stock’s underperformance relative to the Sensex and sector indices over multiple time frames reinforces the challenges faced by the company in delivering consistent returns.
Institutional holdings remain substantial at 26.7%, indicating continued interest from investors with significant analytical capabilities. However, the prevailing market sentiment and financial indicators have led to a Strong Sell rating, reflecting the current assessment of the company’s risk and return profile.
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