Why is ABFRL Stock Falling? Down by 10% today
- Kiran S N
- Jun 4
- 2 min read
On 4th June 2025, Flipkart Investments Private Limited (Walmart-owned) exited its entire 6% stake in ABFRL via a large block deal worth around ₹580–₹600 cr. The shares were sold at a 7% discount to the previous closing price, putting additional downward pressure on the stock. This triggered a further 8–10% fall in a single trading session. Such a large institutional exit often signals negative sentiment and can prompt further selling by other investors.
Earlier Woes
In April 2024, ABFRL announced the demerger of its Madura Fashion & Lifestyle (MFL) business. The goal was to unlock shareholder value and create two distinct listed entities. While analysts saw this as a long-term positive, the market reacted cautiously due to complexities and valuation uncertainties during the expected 12–18 month transition period. Notably, a significant drop of approximately 66-67%, from ₹269 to ₹88, occurred on May 22, 2025 (ex-demerger date). This was a technical adjustment reflecting the value transfer to the new entity, Aditya Birla Lifestyle Brands Ltd (ABLBL), not a business collapse. Shareholders received one share of ABLBL for every ABFRL share held. ABLBL is expected to list by mid-to-end June 2025.
Entity | Focus area | Key brands |
ABFRL | Ethnic wear, masstige (priced between mass-market and luxury products) and value retail, designer ethnic, luxury retail, digital-first brands | Pantaloons, Styleup, TCNS (W, Aurelia, etc.), Tasva, Jaypore, Sabyasachi, Tarun Tahiliani, Masaba, The Collective, Galeries Lafayette, Bewakoof, WROGN, Urbano |
ABLBL | Lifestyle and western wear, sportswear, premium western wear | Louis Philippe, Van Heusen, Peter England, Allen Solly, Simon Carter, Reebok, American eagle |
Beyond these specific events, ABFRL shares have seen a sustained decline of over 20% since September 2024. This longer-term fall is due to several factors:
Bearish Market Sentiment & Weak Financials: Investor sentiment has been very bearish since September 2024 (Q3FY24). ABFRL’s financial results have shown consistent pressure on profitability and sales growth since then.
Sales dropped sharply from ₹3,644 crore in Sep-24 to ₹1,719 crore in Mar-25.
Operating Profit declined from ₹358 crore in Sep-24 to ₹199 crore in Mar-25.
The company has posted net losses for the past 6 years. Quarterly net losses were -₹215 crore in Sep-24, improving slightly to -₹24 crore in Mar-25. Annually, net losses were -₹736 crore in Mar-24 and -₹456 crore in Mar-25.
These losses are attributed to subdued consumer spending post-COVID, large expansion and acquisitions, and high interest costs on borrowings.
Annual Profit & Loss Statement over the years
Values in ₹ Cr | Mar-20 | Mar-21 | Mar-22 | Mar-23 | Mar-24 | Mar-25 |
Sales | 8,788 | 5,249 | 8,136 | 12,418 | 13,996 | 7,355 |
Expenses | 7,528 | 4,666 | 6,998 | 10,860 | 12,474 | 6,696 |
Operating Profit | 1,259 | 583 | 1,138 | 1,557 | 1,522 | 659 |
Net Profit | -165 | -736 | -118 | -59 | -736 | -456 |
EPS in ₹ | -1.89 | -7.93 | -1.16 | -0.38 | -6.19 | -3.08 |
Disclaimer: This content is for educational purposes only; please conduct your own research and consult with a qualified investment advisor before making any investment decisions.
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