TCNS deal may raise debt, near-term profitability risks for ABFRL: Analysts

Given that TCNS has been lagging peers in recovery and underperforming for more than two years now, only a successful turnaround of the same can create shareholder value, analysts said

Street gave a thumbs down to Aditya Birla Fashion and Retail (ABFRL)-TCNS Clothing deal as analysts flagged near-term profitability risks for ABFRL with its latest acquisition.

At the bourses, shares of the Aditya Birla group company tumbled 6.2 per cent in the intra-day trade, before settling 3.27 per cent lower at R 207.2. Those of TCNS, meanwhile, plunged 20 per cent to end at Rs 416.64. By comparison, the benchmark indices gained 1.2 per cent.

The crash comes after Aditya Birla Fashion and Retail (ABFRL), announced last week that it will acquire a controlling stake (51 per cent) in TCNS