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Investing.com - Bernstein has initiated coverage on Aditya Birla (NSE:ADTB) Lifestyle Brands (ABLBL:IN) with a Market Perform rating and a price target of INR170.00.
The research firm’s analysis divides ABLBL’s business into two key segments: Lifestyle brands (Louis Philippe, Van Heusen, Allen Solly, and Peter England) and Emerging brands (Reebok, American Eagle (NYSE:AEO), and Van Heusen Innerwear).
Bernstein notes that the Lifestyle brands segment operates in a well-penetrated category with constrained growth potential, having underperformed with less than 6% CAGR from FY15-25, below nominal GDP growth. Future industry growth in this segment will likely be driven primarily by replacement demand due to high existing formalization.
The Emerging brands segment operates in higher-growth categories like sports, athleisure, and innerwear that outpace the general apparel segment, but Bernstein observes these brands are the smallest among peers and still establishing market position.
While the firm expects double-digit medium-term growth for the Emerging brands segment, it anticipates a muted profitability profile given scale challenges and competitive pressures, with historical 20% growth primarily driven by portfolio additions rather than organic growth.
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