Aditya Birla Fashion reports steep drop of 92% in profit for Dec quarter

BENGALURU (Reuters) - Indian apparel retailer Aditya Birla Fashion and Retail Ltd reported a steep 92% drop in third-quarter profit on Tuesday, hurt by soaring marketing expenses.

Aditya Birla Fashion and Retail, ABFRL
Reuters BENGALURU
2 min read Last Updated : Feb 07 2023 | 5:10 PM IST

BENGALURU (Reuters) - Indian apparel retailer Aditya Birla Fashion and Retail Ltd reported a steep 92% drop in third-quarter profit on Tuesday, hurt by soaring marketing expenses.

Consolidated net profit plunged to 157.9 million rupees ($1.91 million) for the three months that ended Dec. 31 from 1.89 billion rupees a year earlier.

The company cited "accelerated marketing investments" amid a rebound from pandemic lows.

The retailer, which houses brands such as Allen Solly, Pantaloons and Van Heusen, said the quarter was hit by a more than two-fold jump in marketing and strategic investments in new ventures. Total expenses rose more than 31% to 36.02 billion rupees, outpacing a nearly 20% rise in revenue from operations to 35.89 billion rupees.

The Aditya Birla Group unit and the rival Reliance Retail, owned by billionaire Mukesh Ambani's Reliance Industries Ltd, have been on a shopping spree for premium brands in the past few years as they competed for a larger share of India's fashion market.

Last month, Reliance Retail reported a 17% jump in quarterly revenue.

The Birla group company has been investing heavily to build its store presence by partnering with several local and international brands such as high-end wedding wear label Sabyasachi, French luxury retailer Galeries Lafayette and emerging local names Bewakoof and BerryLush.

Meanwhile, sales at its Madura Fashion and Lifestyle unit more than doubled. Revenue from the Pantaloons business, which the group bought from Future Group, rose about 8.7%.

Pantaloons was hit by sluggish growth in smaller towns, "transient" inflationary pressures in the value segment and a slip in sales after the Hindu festival of Diwali mid-November, the company said in an investor presentation.

Shares of Aditya Birla Fashion and Retail were down 1.6% in afternoon trading on Tuesday.

($1 = 82.6730 Indian rupees)

 

(Reporting by Priya Sagar in Bengaluru; Editing by Dhanya Ann Thoppil)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :Aditya Birla Retail LtdMarketingInvestment

First Published: Feb 07 2023 | 5:10 PM IST

Next Story