ABLBL Q4 FY26: Double-digit growth and Emerging Business turns profitable

Aditya Birla Lifestyle Brands Limited (ABLBL) ended Q4 FY26 with a second consecutive quarter of double-digit growth, even as management described a stable consumption environment that was disrupted late in the quarter by geopolitical uncertainty. On a consolidated basis, revenue rose 12 percent year on year to INR 2,174 crore. EBITDA increased 14 percent to INR 375 crore and margin improved to 17.2 percent from 17.0 percent last year. Reported PAT grew to INR 55 crore from INR 38 crore, while normalized PAT was INR 60 crore, adjusted for a one-time exceptional impact linked to the statutory effect of new labour codes.

For the full year, ABLBL reported revenue of INR 8,396 crore, up 7 percent. EBITDA increased 13 percent to INR 1,429 crore, and margin expanded to 17.0 percent from 16.2 percent. Reported PAT rose to INR 171 crore from INR 60 crore, while normalized PAT stood at INR 209 crore. Management also highlighted higher depreciation of about INR 40 crore year on year due to aggressive store expansion in FY26.

Market context and operating backdrop

Management said consumption trends in Q4 were broadly in line with Q3. The wedding calendar was uneven, with no wedding dates in January and more clustered dates in February and March versus last year. Towards the end of the quarter, consumer sentiment moderated amid geopolitical uncertainty and heightened market volatility. At the same time, the company pointed to a growing preference for smart and versatile dressing and a faster adoption of technology and AI across operations, with hyperlocal fulfilment as a focus.

Despite these moving parts, the quarter was led by strong multi-channel performance. The company reported overall retail like to like growth of 6 percent in Q4 and 9 percent for FY26.

Segment performance: Lifestyle Brands steady, Emerging Business improves sharply

ABLBL reports two operating segments: Lifestyle Brands and Emerging Business.

Lifestyle Brands delivered Q4 revenue of INR 1,829 crore, up 11 percent year on year, with EBITDA margin at 20.0 percent. Management described broad-based channel traction, with double-digit growth in e-commerce and departmental store business. Retail like to like for the portfolio was 4 percent for the quarter.

Emerging Business delivered Q4 revenue of INR 356 crore, up 18 percent, and EBITDA improved to INR 15 crore, translating to a 4.2 percent EBITDA margin versus 0 percent last year. Management stated this reflected improved profitability across brands.

For FY26, Lifestyle Brands revenue stood at INR 7,154 crore, up 8 percent, with EBITDA margin at 19.6 percent. Emerging Business revenue was INR 1,282 crore, up 2 percent year on year, but EBITDA rose to INR 50 crore from INR 2 crore, lifting margin to 3.9 percent. Management noted that excluding Forever21, emerging businesses grew 8 percent year on year, and said the margin expansion was supported by the closure of Forever21 and improved profitability across other brands.

Financial snapshot (Consolidated)

Note: Q4 FY26 includes an exceptional item of INR -8 crore linked to labour code related statutory impact. FY26 exceptional item was INR -49 crore.

Channel mix: Lifestyle Brands leans on retail, e-commerce accelerates in Q4

Within Lifestyle Brands, ABLBL provided channel-wise revenue data.

In Q4 FY26, retail revenue grew 7 percent to INR 1,165 crore, wholesale increased 8 percent to INR 405 crore, and e-commerce grew 26 percent to INR 131 crore. The others channel rose sharply to INR 128 crore, up 67 percent year on year.

In the earnings call, management clarified that beyond the core channels, the company has a contract manufacturing business that exports to brands globally. A new large factory added capacity and supported growth in this B2B stream. Management also mentioned institutional business as part of the others bucket.

For FY26, retail revenue was INR 4,627 crore, up 8 percent; wholesale was INR 1,466 crore, up 9 percent; e-commerce was INR 733 crore, up 2 percent; and others was INR 329 crore, up 34 percent.

Expansion engine: network scale rises, capex remains elevated

A key theme through the presentation and call was expansion. Management said FY26 saw 300 plus gross store additions. By end March 2026, ABLBL’s footprint stood at 3,348 stores across about 4.9 million square feet, reaching nearly 800 cities and towns. The company also highlighted its presence in 190 plus malls and 560 plus small town stores.

Management described network expansion as a mix of new malls, new residential catchments in large cities, deeper penetration in existing markets, and small town expansion. It also emphasized a larger store strategy via Project Stretch, where stores are made bigger in the same location, supported by ongoing renovations.

On the call, management guided FY27 capex at about INR 300 crore, and also referenced an INR 250 crore to INR 300 crore band. It stated that roughly INR 200 crore would be directed to retail expansion and renovations, with the balance covering routine and maintenance capex including manufacturing upgrades.

Management also clarified that about 36 to 37 percent of the store network is company owned and company operated, or about 1,200 to 1,250 stores.

Emerging Business: Reebok scales; Innerwear targets a profitable quarter in FY27

The Emerging Business portfolio includes Reebok, American Eagle, and Van Heusen Innerwear. Management said the portfolio now spans over 390 stores.

Reebok stood out in Q4, with the presentation citing about 30 percent year on year growth. The brand is now present in 210 plus stores after 50 plus gross additions in FY26. Management also said an Olympic gold medalist, Manu Bhaker, was onboarded as brand ambassador, and noted six stores were launched in a Reebok Pro format focused on small town expansion.

In the call, management indicated that Reebok’s runway remains significantly larger than its current 210 store footprint. It guided 40 to 50 store additions per year for the next few years, supported by both like to like momentum and product innovation.

Van Heusen Innerwear was described as being on a path to breakeven. The presentation cited five consecutive quarters of double-digit retail like to like and said retail like to like was 30 percent in FY26. The brand is present across about 38,000 trade outlets and 100 plus exclusive stores, with about 1,500 counters added in FY26.

On profitability, management said it expects at least one profitable quarter in FY27 for Van Heusen Innerwear, typically in the best quarter of the year, followed by a transition toward steady profitability across quarters.

Balance sheet, cash flows, and capital returns

The company ended March 2026 with net debt of INR 726 crore, down from INR 781 crore in March 2025. Lease liabilities were INR 2,184 crore at March 2026. Net worth increased to INR 1,412 crore.

Management stated that operating cash flow before capex and security deposit was INR 450 crore for FY26 and that a large share of cash was used to fund store expansion.

The board declared a dividend of INR 0.50 per equity share. Management also articulated a dividend policy intent of paying broadly 15 percent to 25 percent of net profit over time, while continuing to invest in growth. It said the company could become debt free in the next three years, but emphasized that it is not being pursued as an aggressive near-term target.

What to watch next

Management repeatedly stressed that consumer demand can fluctuate quarter to quarter, especially in wedding-led categories. It also acknowledged the risk of input cost inflation, noting crude oil’s impact on polyester and the lag between cost movements and sourcing impact.

At the same time, ABLBL enters FY27 with three visible operating levers: continued store expansion with capex guidance around INR 300 crore, improving profitability in Emerging Business, and a steady margin profile in Lifestyle Brands. The company’s ability to convert this into consistent cash generation while funding expansion and reducing leverage will remain a central investor focus.