Aditya Birla Fashion picks 51% stakes in House of Masaba; stock hits new high – Analyst explains the deal

The shares of Aditya Birla Fashion and Retail Limited (ABFRL) have touched an all-time high of Rs 315.75 per share on the BSE intraday trade on Monday, as the company acquires controlling stake of 51 per cent in the apparel and non-apparel company House of Masaba for Rs 90 crore. 

According to press statement of the company, “This partnership aims to create a young, aspirational and digital-led portfolio play, across the affordable luxury segment in the fashion, beauty and accessory categories.” 

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This partnership will also mark ABFRL’s entry into the beauty & personal care market in India, which offers tremendous opportunity to build distinctive, scalable home-grown brands, it further said. 

According to Zee Business senior research analyst, House of Masaba mulling to double its turnover to Rs 30 crore in the current financial year as compared to non-covid period of Rs 16 crore in FY19. 

The brand is targeting to achieve annual revenues of around Rs 500 crore in the next 5 years, the company said in a statement, adding further that the brand will straddle across the entire lifestyle offerings ranging from apparel, accessories, beauty and other lifestyle. 

House of Masaba, is a brand of Masaba Gupta, a renowned fashion designer, and daughter of famous Bollywood actor Neena Gupta. 

Earlier in December, ABFRL had acquired India’s licensing of Reebok and had bought it for whooping Rs 18000 crore from Adidas. With purchase of House of Masaba and Reebok License, the company is entering into different segments and making a strong position in the market, the analyst said. 

With this acquisition and December’s Reebok deal, the company may see larger jump in the overall revenues, Gupta also said in his comment over an acquisition. 

The market analyst and Choice Broking Executive Director Sumeet Bagadia suggests investors to hold position in ABFRL stock, as it is likely to show a good move going forward.  

The stock has started sustaining over Rs 300 per share levels and it may show an immediate further move between 325-350 apiece levels as stock structure is strong, the analyst said.