Aditya Birla Group Bets On ‘Dual Growth Engines’ To Drive Fashion Expansion
Aditya Birla Group Chairperson Kumar Mangalam Birla has said the group is strategically positioned to capture emerging opportunities in India’s fast-evolving fashion industry, with Aditya Birla Fashion and Retail Ltd (ABFRL) and Aditya Birla Lifestyle Brands Ltd (ABLBL) now operating as “dual growth engines.”
Addressing shareholders in ABFRL’s latest annual report, Birla pointed to India’s economic momentum, noting that per capita GDP is expected to climb from US$ 2,500 to over US$ 4,000 in the next five years. This growth, he said, will accelerate aspirational consumption, shift demand from unorganised to organised retail, and fuel the creation of brands across categories.
“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,” Birla said.
The restructuring of the group’s fashion portfolio was completed in June 2025 with the demerger of ABLBL from ABFRL and its subsequent listing. ABLBL now houses marquee lifestyle brands including Louis Philippe, Van Heusen, Allen Solly and Peter England, along with global names Reebok and American Eagle. ABFRL retains its retail-led businesses such as Pantaloons, its digital-first platform TMRW, and an expanding ethnic wear portfolio comprising Sabyasachi, Shantnu & Nikhil, House of Masaba, Tarun Tahiliani, Jaypore, Tasva and TCNS.
“By establishing ABFRL and ABLBL as distinct entities, we now operate dual growth engines that provide a competitive edge across critical segments of the Indian fashion industry,” Birla said.
The group has also bolstered its financial base, raising US$ 490 million through a mix of Qualified Institutional Placement (QIP) and preferential issuance. The fresh infusion, Birla noted, has strengthened the balance sheet of the demerged ABFRL and given it flexibility to pursue “organic growth and sustainable profitability.”
Over the next five years, ABLBL aims to deliver consistent double-digit growth in revenue and EBITDA, supported by like-to-like growth and continued store expansion. More than 250 stores are already in the pipeline for FY26, with a mix of franchise-operated and company-owned formats.
ABFRL, meanwhile, is focusing on improving profitability in its retail arm, Pantaloons, targeting a 300 bps margin improvement over the next five years. Plans include 20–25 new store additions annually, each expected to turn profitable in its first year, with payback within four years. Its value format, Style Up, will expand more aggressively, with 50 stores planned for FY26 and a network of 200+ outlets by FY28, supported by improvements in sales productivity and unit economics.
The annual report also assessed industry dynamics, noting that the Indian apparel sector experienced a moderate recovery in FY25, aided by easing inflation and improved consumption. However, challenges persist, including inconsistent footfalls, occasion-led purchases and weak discretionary spending in urban markets.
The Indian apparel market was valued at Rs 9.3 lakh crore in FY25, growing at a CAGR of 11% since FY19. By FY30, the market is expected to surpass Rs 14 lakh crore, driven by rising disposable incomes, rapid urbanisation, brand consciousness and the expansion of organised retail and e-commerce, particularly in semi-urban and lower-tier cities.
Technological innovations, such as virtual try-ons, AI-driven recommendations and personalised shopping, are also expected to shape the sector’s growth trajectory.
