Sales uptick, lower debt to help in Aditya Birla Fashion recovery

Cost reduction, higher private label sales to aid margins

A sequential recovery in the second quarter, cost rationalization, and deleveraging have helped the Aditya Birla Fashion and Retail (ABFRL) stock gain over 20 per cent since the beginning of October. After an 85 per cent fall in revenue to Rs 323 crore in the June quarter (Q1) due to the lockdown, sales recovered on a sequential basis to Rs 1,028 crore in Q2.

The reopening of stores, which reached 96 per cent of pre-Covid levels in September, and gradual increase in footfall cushioned the fall in Q2. Given the performance in the first half and a gradual recovery, analysts expect