Target: ₹140CMP: ₹94.15We maintain Buy on Aditya Birla Lifestyle Brands (ABLB) and TP of ₹140 (20x June 2028E EBITDA). While Q1 revenue was in line, EBITDA was 7 per cent/6 per cent ahead of our/street expectations, led by better performance in emerging segments. ABLB sustained its double-digit growth momentum, at about 11 per cent in Q1. Growth was led by the online channel, while the wholesale channel grew slower, as primary sales were temporarily hit due to the change in the festive calendar; secondary sales growth was healthy, in double digits. Small towns continue to be a key growth engine for the company, delivering double-digit growth for the fifth consecutive quarter. . ABLB attributed the sustained momentum to strong execution, an improved merchandise mix, and a gradual recovery in demand. While Peter England remains the dominant brand in these markets, Allen Solly, Van Heusen and Louis Philippe have also expanded their presence. Looking ahead, the management believes the contribution of small towns to retail sales, currently at 15-16 per cent, has the potential to exceed 20 per cent over the next three-five years.It remains watchful of inflation in key raw materials and a potential demand slowdown due to the rise in inflation in H2, though there is no major visible impact as of now. We remain positive on ABLB, driven by low double-digit topline growth prospects and gradual margin gains, with turnaround in emerging businesses.Published on August 4, 2026