CRISIL Ratings has reaffirmed the ratings for Aditya Birla Lifestyle Brands Limited’s (ABLBL) bank facilities and Commercial Paper at ‘CRISIL AA+/Stable’ and ‘CRISIL A1+’, respectively. A new rating of ‘CRISIL AA+/Stable’ has been assigned to the proposed Non-Convertible Debentures (NCDs). Concurrently, the rating on existing NCDs worth Rs 500 crore has been withdrawn at the company’s request.
Rating Actions Summary
CRISIL Ratings has taken several actions concerning ABLBL’s debt instruments. The long-term rating for total bank loan facilities, rated at Rs.1500 Crore, has been reaffirmed at ‘CRISIL AA+/Stable’. The short-term rating remains ‘CRISIL A1+’ (reaffirmed).
Specifically for the proposed issuance:
- Non Convertible Debentures (Rs 500 Crore): Rating Assigned as ‘CRISIL AA+/Stable’.
- Commercial Paper (Rs 1000 Crore): Rating Reaffirmed as ‘CRISIL A1+’.
The rating for existing Non Convertible Debentures (Rs 500 Crore) has been Withdrawn as per the company’s request, consistent with CRISIL policy.
Key Rating Drivers: Strengths
The ratings reflect ABLBL’s strong market position, supported by a diverse brand portfolio including Louis Philippe, Van Heusen, Peter England, and Allen Solly, ensuring coverage across various price segments. The company benefits from an asset-light model and strong brand penetration, operating 3,315 brand stores as of December 2025.
Financially, the profile is expected to remain robust. Key debt protection metrics are comfortable: Post Ind-AS interest coverage stood at 3.8 times for the first nine months of fiscal 2026. Post Ind-AS adjusted gearing is projected to remain at 3-4 times over the medium term. The company is expected to meet its yearly capex requirement of Rs 200-250 crore through internal accruals.
Furthermore, ABLBL benefits significantly from superior financial flexibility as a part of the larger Aditya Birla group, which holds a 46.60% equity stake.
Operating Performance Highlights (9M FY2026)
For the first nine months of fiscal 2026, ABLBL’s revenue grew 6% year-on-year to Rs 6,222 crore, compared to Rs 5,888 crore in the corresponding period last year. Post Ind-AS operating profitability (OPBDITA) increased to Rs 1,054 crore, translating to an operating margin of approximately 15.9%, marking an improvement of about 90 basis points.
Key Rating Drivers: Weaknesses and Outlook
The primary constraints are intense competition in the Indian apparel sector from large conglomerates like Tata and Reliance, and susceptibility to economic downturns due to the discretionary nature of its products.
The outlook is assessed as Stable. CRISIL Ratings believes ABLBL will maintain its strong market position and robust financial risk profile, leveraging its established brand equity and group support.
Upward Rating Triggers
An upward revision could be triggered by:
- Significant revenue increase while maintaining post Ind-AS operating profitability above 17%.
- Sustained strong financial risk profile and limited capital investment.
Downward Rating Triggers
A negative outlook could result from a sustained post Ind-AS net debt to operating profitability ratio above 2.5 times, or a material weakening in the credit quality or support stance of the parent Aditya Birla group.
Source: BSE
