With “dual growth engines” ABFRL and ABLBL, the Aditya Birla Group is strategically positioned to capture emerging opportunities in the Indian fashion industry, which is undergoing rapid evolution, its Chairperson, Kumar Mangalam Birla said.
Addressing shareholders of Aditya Birla Fashion and Retail Ltd (ABFRL) in the latest annual report, Birla said India’s per capita GDP is expected to grow from USD 2,500 to over USD 4,000 over the next five years, as it is entering a phase of aspirational consumption.
This, in turn, will drive significant shifts from the unorganised to the organised retail sector, accelerate demand across all fashion categories and fuel creation of brands.
“With India’s dynamic economic growth, an expanding middle class and rapid shifts in consumer behaviour, we are confident that the opportunities ahead are significant,” said Birla.
The group has completed the demerger of Aditya Birla Lifestyle Brands Ltd (ABLBL) from ABFRL and subsequently listed in June 2025. It has lifestyle brands — Louis Philippe, Van Heusen, Allen Solly, and Peter England, along with Reebok, American Eagle.
ABFRL houses retail business under Pantaloons and digital-first brands (TMRW), along with a host of ethnic brands, which it owns, such as designer-led Sabyasachi, Shantnu & Nikhil, House of Masaba, and Tarun Tahiliani. It will also have premium ethnic wear brands of Jaypore, Tasva & TCNS portfolio.
“With the establishment of ABFRL and ABLBL as two distinct entities, we now operate dual growth engines that are strategically positioned to capture emerging opportunities, providing us with a competitive edge across critical segments of the Indian fashion industry,” said Birla.
Moreover, through raising USD 490 million through a combination of Qualified Institutional Placement (QIP) and preferential issuance, there is a “significant capital infusion”, strengthening the balance sheet of the demerged ABFRL, giving flexibility to pursue aggressive growth.
“Today, with the demerger completed and fresh capital in place, we have entered a new phase — one focused on organic growth and sustainable profitability,” he said, adding that the group’s “long-term strategy remains clear — to be present across all major fashion consumption themes aligned with evolving consumer behaviours.”
Over the next five years, ABLBL aims to deliver consistent double-digit growth in revenue and EBITDA, driven by a combination of like-to-like (LTL) growth and continued retail expansion.
“Over 250 stores are already in the pipeline for FY 2025-26, reinforcing the company’s growth momentum. The upcoming store additions are planned to be a balanced mix of franchise-operated and company-owned stores,” the annual report said.
On ABFRL, it said its retail business Pantaloons in the near term, will “prioritise profitability and strengthen overall network health, targeting an EBITDA margin improvement of approximately 300bps over the next five years”.
“20-25 new store additions are planned per year, with each expected to achieve profitability within the first year of operations and a payback period of around four years. At Style Up, the emphasis will be on improving unit economics by increasing sales-per-square-foot and overall profitability. We aim to open around 50 stores in FY 2025-26, followed by an incrementally aggressive expansion in the subsequent years, scaling the network to 200+ stores by FY 2027-28,” it said.
On the Indian Apparel Industry, the report said it experienced a moderate recovery in 2024-25, aided by easing inflation and a gradual uptick in consumption demand. However, the recovery remained uneven, with the sector continuing to grapple with challenges such as inconsistent footfalls, reliance on occasion-driven purchases and subdued urban discretionary spending.
The Indian apparel market reached Rs 9.3 lakh crore in FY25, registering a CAGR of 11 per cent since FY19.
“The market is expected to surpass Rs 14 lakh crore by FY30, fuelled by rising disposable incomes, rapid urbanisation, growing brand consciousness, and the continued expansion of organised retail and e-commerce — particularly across semi-urban and lower-tier cities,” the annual report said.
Technological advancements are also accelerating this growth trajectory with innovations such as virtual try-ons, AI-driven product recommendations, and personalised shopping experiences.
