Aditya Birla Lifestyle Brands Limited: Navigating a Dynamic Market with Strategic Execution in Q2 FY26

Aditya Birla Lifestyle Brands Limited (ABLBL) has reported a resilient performance for the second quarter of Fiscal Year 2026, demonstrating strategic execution amidst a mixed operating environment. The company achieved a 4% year-on-year revenue growth, reaching INR 2,038 crore. This growth was primarily driven by the strong performance of its Lifestyle Brands segment. Despite challenges such as cautious consumer sentiment and the impact of a GST transition, ABLBL managed to expand its EBITDA by 12% to INR 338 crore, with a notable 125 basis points improvement in EBITDA margin, reaching 16.6%. The company also turned a net loss of INR 59 crore in the previous quarter into a profit after tax (PAT) of INR 23 crore in Q2 FY26, showcasing improved operating efficiency.

Segmental Performance and Growth Drivers

The Lifestyle Brands segment, which includes prominent names like Louis Philippe, Van Heusen, Allen Solly, and Peter England, was a key growth engine, registering a 7% year-on-year revenue increase to INR 1,754 crore. This segment's performance was bolstered by robust double-digit like-to-like (L2L) growth across all brands, reflecting strong underlying brand momentum and successful retail execution. The company highlighted that small-town markets continued their revival, contributing significantly to this growth. The Emerging Business segment, comprising Van Heusen Innerwear, American Eagle, and Reebok, experienced a 10% decline in revenue to INR 292 crore. This decline was primarily attributed to the exit of Forever 21 from the base year numbers. However, the remaining businesses within this segment delivered a robust 11% L2L growth, with a significant 130 basis points margin expansion, mainly due to reduced losses in the Van Heusen Innerwear business.

Strategic Initiatives and Market Context

ABLBL continued its aggressive retail expansion, adding over 75 new stores in Q2 and 125+ in H1 FY26, with a focus on larger formats. The company's retail footprint now spans 4.7 million square feet across 785+ cities and towns, with approximately 3,250 stores. This expansion is complemented by ongoing product portfolio upgrades and impactful marketing campaigns, including celebrity associations and high-impact Go-To-Market (GTM) strategies, aimed at deepening consumer engagement and strengthening brand salience. The management acknowledged that the GST transition and localized issues in the East had temporarily moderated overall momentum, particularly affecting wholesale partners. However, they believe these disruptions are largely behind them and expect strong growth in the coming quarters, especially with the wedding season.

Outlook and Management Confidence

Management expressed confidence in sustaining profitable growth and expanding its presence across both established and emerging markets. They anticipate a steady net addition of stores and expect the Lifestyle Brands segment to report strong growth. The emerging business portfolio is positioned for profitable and scalable growth, with a medium-term expectation of double-digit growth across its brands. The company is actively managing its working capital, with inventory build-up for the festive and wedding seasons, and expects debt levels to decrease by the end of FY26. ABLBL's focus remains on driving retail productivity, enhancing in-store experiences, and leveraging its deep market knowledge and strong creation ecosystem to maintain its competitive edge.