CHAIRMANS LETTER TO SHAREHOLDERS
Dear Shareholders,
In an era marked by unprecedented global challenges, the imperative for businesses to
transcend conventional paradigms has never been more pressing.
At the Aditya Birla Group, we recognise that our success is intrinsically tied to the
wellbeing of society and the planet we inhabit. As custodians of progress and stewards of
sustainable growth, we embrace the ethos of being a force for good in all facets of our
operations. At the heart of our philosophy lies the conviction that business can and must
serve as a catalyst for positive change. Beyond the pursuit of profit margins, we envision
a world where economic prosperity harmonises with social welfare and environmental
stewardship.
This vision guides our strategic decisions, propelling us to harness the transformative
power of business to create collective prosperity. Being a force for good entails a
multifaceted approach that extends across our entire value chain. From fostering inclusive
growth and empowering local communities to mitigating environmental impact and creating
prosperity for our nation and its people, our commitment to operating responsibly is woven
into the fabric of our business endeavours. It is part of our DNA and our legacy. It
defines who we are.
By creating value for all stakeholders - shareholders, employees, customers, and
society at large - we aim to nurture an ecosystem of mutual benefit and collective
advancement.
This philosophy underpins our unwavering dedication to ethical governance, transparent
communication, and responsible business practices. As we navigate the complexities of a
rapidly evolving world, we remain steadfast in our commitment to being agents of positive
change.
Guided by our Purpose ‘To enrich lives, by building dynamic and responsible
businesses and institutions, that inspire trust', and by leveraging our resources,
expertise, and influence, weaspire to be a catalyst for meaningful impact, shaping a
future where business serves as a force for good in everything that we touch and do.
Global Economy:
Resilience in Motion
Economic activity remained robust throughout the global disinflation of 2023 defying
warnings of stagflation and global recession. The IMF reported that global GDP grew by 3.3
per cent in 2023, which is only 10 bps points lower than the pre-pandemic average
(2013-2019) of 3.4 per cent. Looking ahead, growth is expected to be stable with projected
rates of 3.2 per cent in 2024 and 3.3 per cent in 2025.
The U.S. economy exhibited robust growth in 2023, achieving a 2.5 per cent increase,
defying many economists' recession forecasts. This strong performance was driven by
several factors, including higher-than-usual immigration, government fiscal support, and
accumulated savings from the pandemic. In the first half of 2024, the growth momentum of
the US economy seems to be slowing, accompanied by ongoing disinflation. Labor markets are
also showing clear signs of normalization, evidenced by slower hiring rates, a rising
unemployment rate, and a slowdown in wage growth. Considering these developments, monetary
policy is expected to ease.
Real GDP growth in the Euro area has been sluggish, with a modest increase of 0.5 per
cent in 2023. This weak growth is primarily due to reduced private consumption, stemming
from a significant terms-of-trade shock triggered by the Ukraine invasion, which led to an
energy crisis. In 2024 growth in euro area showing some signs of recovery. The IMF has
revised its projections for EU growth in 2024, raising it by 10 bps points from 0.8
percent to 0.9 per cent. This update is attributed to stronger household consumption,
driven by the subsiding effects of the energy price shock and a decrease in inflation,
which bolsters real income growth.
Recently, the IMF revised China's growth forecast for 2024 upwards from 4.6 per cent to
5 per cent, mainly due to a rebound in private consumption and strong exports in the first
quarter. However, the real estate sector continues to face challenges and remains a drag
on GDP.
India: Leading the Way
The Indian economy remains resilient despite global risks, growing at a strong pace in
FY24. Real GDP growth accelerated to 8.2 per cent from 7.0 per cent in the previous year,
marking the third consecutive year of 7 per cent or higher growth. Investment played a key
role in driving domestic demand, with gross fixed capital formation (GFCF) rising to 9 per
cent in FY24 from 6.6 per cent in FY23, largely supported by government spending on
infrastructure.
The outlook for the Indian economy remains positive, supported by strengthening
macroeconomic fundamentals, a robust financial and corporate sector, and a resilient
external sector. The government's continued thrust on capex while pursuing fiscal
consolidation, and consumer and business optimism augur well for investment and
consumption demand.
Aditya Birla Group :
In Perspective
Amid this economic backdrop, the Aditya Birla Group's strong performance in FY24 stands
as a testament to our unwavering commitment to purpose-driven growth, driving sustained
value creation for stakeholders across our diverse business portfolio.
This success is underpinned by our exceptional talent pool, whose dedication and
entrepreneurial spirit are the true catalysts for our sustained achievements.
This year, we have advanced our purpose-driven approach to business by integrating our
purpose in every stage of the employee life cycle: hiring, induction, learning,
performance appraisal and continuous employee connect.
Being the force for good for ABGites: By enabling employees to develop capabilities and
achieve their true potential. 186 learning events covering 4700+ ABGites were held by
Gyanodaya, our Learning and Leadership Development Center. In addition, 14000+ ABGites
were covered through outreach programs, done closer to the employees in our Units /
offices all over the globe. Robust digital learning, enabled 81% of the employees to learn
at their convenience around topics of interest and need.
Our leaders play a crucial role in strengthening theAditya Birla Croup's strong
performance in FY24 stands as a testament to our unwavering commitment to purpose-driven
growth, driving sustained value creation for stakeholders across our diverse business
portfolio.succession pipeline. Through Business and Functional Talent Councils, they set
the vision for their respective areas, identify the future capabilities needed for
success, review the availability of talent, and agree on actions to enhance the talent
pipeline. This year, over 12,000 employees (99% of the eligible population) underwent
potential assessments, enabling us to identify high- potential talent across all levels
and prepare them for leadership succession. As a result, 56% of critical mid and
senior-level positions were filled through our internal pipeline. Additionally, the
internal and external hiring ratio for senior management roles has improved from 59:41 to
75:25 over the past three years.
Our strong employer brand enabled us to attract high- quality talent for three new
businesses built grounds-up: Birla Opus, Birla Pivot and Novel Jewels. We hired 14800+
employees across levels in the management cadre, 75% of whom are millennials and Gen Z.
We have maintained our focus on strengthening gender diversity, ensuring more women are
in mainstream roles and leading strategic responsibilities across various functions and
regions. Currently, women make up 15.6% of our management cadre, with 277 women holding
senior and top leadership positions. We are also making a special effort to increase the
representation of women in technical roles. For example, we have appointed our first
female unit head for the battery enclosure plant, enrolled 25 women in a one- year
apprenticeship program in core mining who will be placed in UltraTech, and have women
serving as Territory Sales Managers at Birla Opus.
We strive to enrich the lives of our employees through integrated healthcare solutions
that focus on their physical and emotional well-being, as well as that of their families.
Our Digital Health and Wellbeing app, AB Multiply, has enrolled 26,000 employees for
holistic wellness services. Additionally, over 9,000 employees have benefitedfrom
company-sponsored annual physical health checkups. We have made significant efforts to
reduce the stigma associated with mental health, ensuring that employees and their
families can access professional and confidential counselling services when needed. Last
year, over 1,000 employees or their family members sought help, marking an increase of
more than 25%.
The results of ABG Vibes 2023, our annual engagement survey, reflect our commitment to
being a force for good for our employees. The scores have improved in all areas across
employee segments compared to the previous cycle: 91% of employees are proud to be
associated with the Group, 93% would recommend the Group as a great place to work, and 87%
see themselves working with the Group two years from now (an 8% increase from the last
cycle). Additionally, 89% of employees find a sense of meaning and purpose in their work,
and 91% are optimistic about the future of the business.
Indeed, the Aditya Birla Group stands at an exciting juncture. Many of our businesses
are poised for transformational growth, while new ventures are emerging with a lot of
promise. We are not just expanding in size but also diversifying in scope across various
industries and regions.
Our leaders play a crucial role in strengthening the succession pipeline. Through
Business and Functional Talent Councils, they set the vision for their respective areas,
identify the future capabilities needed for success, review the availability of talent,
and agree on actions to enhance the talent pipeline.
Your Company's Performance
As one of India's foremost branded fashion players, your Company continues to offer an
extensive and diverse portfolio of products and categories under established and emerging
brands, catering to a wide range of consumer needs. Our expansive presence, covering 11.9
million square feet of retail space with over 4,600 stores across more than 900 cities and
towns, is a testament to our commitment to reaching our customers wherever they are.
In addition to our vast store footprint, our brands are also available in over 37,000
multi-brand outlets and 9,500 shop-in-shops within departmental stores. Our brands have a
strong online presence, available on multiple e-commerce platforms, and many also feature
on their own dedicated websites and apps, ensuring seamless access for our customers. This
extensive network not only extends our reach to customers but also deepens our
relationships with them, helping us playan important role in their lives, fulfilling their
fashion aspirations and desires.
Mastering the New Normal
The apparel industry has faced considerable challenges since the festive season of
FY23, with slowdown in demand and rising inflation posing significant headwinds for
growth. Despite these obstacles, your Company has shown remarkable resilience trait
attributable to comprehensiveness of our portfolio that caters to diverse customers across
multiple occasions and markets. Driving efficiency has been another important lever to
sail through the tough environment,wherein by streamlining of our network, optimizing
channels, and leveraging technology, your Company has been able to reduce costs and
improve profits.
For FY24, your Company's revenue stood at ' 13,996 Cr, reflecting a 13% year-on-year
growth, while EBITDA was ' 1,703 Cr, a 5% growth over previous year. Over the years, your
Company has strategically developed a comprehensive portfolio that spans various
occasions, price points, segments, and categories. This portfolio is built around five
large themes, in the fashion apparel market. These five areas are:
• Western Brands
• Masstige and Value Retail
• Ethnic Brands
• Luxury Retail
• Digital-First Brands
This portfolio strategy has allowed us to establish strong, strategic positions in key
market opportunities, providing us with a significant early mover advantage.
Strategy to Unlock Shareholder Value
Your Company's board approved the vertical demerger of the Madura Fashion and Lifestyle
(MFL) business from ABFRL into a newly incorporated entity named Aditya Birla Lifestyle
Brands Limited (ABLBL). As two separately listed entities, each will have the potential to
be an independent growth engine with distinct capital structures and parallel value
creation opportunities, thus unlocking significant value for shareholders through
independent market-led valuation.
With a focused capital allocation strategy and a unique path for value creation - both
entities will concentrate on specific growth areas aligned with their individual business
models, ensuring optimal stakeholder returns.
Addressing consumer needs across key categories
Western branded fashiondominates the lifestyle market, driven by innovation, global
appeal, and a trend towards premiumization. Your Company's presence is markedby iconic
brands poised for significant growth, supported by deep distribution, category extensions
and a financially robust, asset-light model.
Our Lifestyle brands have successfully leveraged this profitable model, achieving
record profitability this fiscal year. Casualization and premiumization are pivotal
strategies for these brands, broadening product offerings for all occasions with new
designs using best-in-class fabrics.
Reebok, American Eagle, and Van Heusen Innerwearare strategically positioned to address
different consumer needs, expanding the reach of our branded portfolio and attracting
newer customers. These three brands have a strong growth momentum and are on track to
become mega-brands within your Company's portfolio, ably complementing your Company's
existing branded fashion portfolio.
With India's expanding middle class transitioning to organized and branded fashion,
value and masstige retail present a significant market opportunity. We are strategically
positioned to capture this market through Pantaloons and Style Up.
Pantaloons is dedicated to delight its customers through high quality products at
attractive prices in a young, refreshed store identity.
Style Up, with its distinctive value proposition, is making inroads into the wardrobes
of its customers offering high fashion at sharp prices. Going forward your Company will
continue to evaluate this format in newer markets with an intent to build scale. At the
back of these initiatives, we are well-placed to capture the opportunities in the value
retail market and drive substantial growth by building a compelling sustainable play with
Pantaloons and Style Up.
Luxury retail is set for strong growth, driven by rising
With a focused capital allocation strategy and a unique path for value creation - both
entities will concentrate on specific growth areas aligned with their individual business
models, ensuring optimal stakeholder returns.
Our expansive presence, covering 11.9 million square feet of retail space with over
4,600 stores across more than 900 cities and towns, is a testament to our commitment to
reaching our customers wherever they are.disposable incomes, increased demand for premium
& personalized experiences, and the expansion of digital channels. The
"Collective & Mono brands" portfolio has continued to demonstrate a strong
consumer franchisee as reflected in its rapid online growth and strategic store expansion.
This business has successfully built a growing community and deepened consumer engagement
through building high quality customer experiences. The partnership with French department
store chain, Galeries Lafayette will further enrich our luxury portfolio, offering
customers access to over 200 fashion brands, with the first store set to open in Mumbai
next year.
Ethnic wear, one of the largest categories in apparel, is poised for strong growth,
fueled by the shift towards organized retail and the rising demand for ready-to-wear
garments.
As consumers increasingly seek convenience and quality, organized retail is expanding,
offering a modern blend of traditional ethnic wear. Your Company holds the largest and
most comprehensive ethnic brand portfolio, catering to a diverse audience for all
occasions and price points. In
The Indian online D2C market is one of the fastest-growing space, driven by rapidly
expanding internet user base and rising purchasing power of the younger demographic. TMRW,
your Company's digital venture, continues to FY24, your Company filled up expand its
dynamic digital the women premium ethnic brand aimed at Gen space in its portfolio through
Z and millennials. Through the acquisition of a majority a Brand Builder approachstake in
TCNS Clothing Co. and tech-driven operationalLimited, the company that enhancements across
thehas brands like W, Aurelia, value chain, these brands shaHWishful, Folksong and
continue to see a significantElleven scale up going forward.
This ethnic portfolio is now Your Company has launchedoperating within two distinct
many initiatives to integrate segments - Designer led a digital-led operating modelbrands
and Premium wear and strategy. Digital is thebrands backbone of our approach,driving how
we connect Designer led brands include with customers, design Sabyasachi, Shantnu &
Nikhil, our merchandise, plan our Tarun Tahiliani, and House inventory, and manageof
Masaba. These brands fulfillment. Over 50% of ourcontinue to showcase unique stores are
fully omni-enabled, craftsmanship through new while the overall E-commerce offerings and
extensions in channel sales were ~12% of ourboth apparel and accessories. business.
Our premium wear portfolio,includes TASVA, Jaypore With deep commitment toand TCNS
brands. TASVA, sustainability, your Companyour premium menswear embeds sustainable
practicesethnic brand launched in Into every aspect of ltscollaboration with renowned
operations, from planningIndian designer, Tarun Tahiliani, and sourcing to supp^ chain is
poised to capitalize on the management and packaging. growing branded occasion Robust
mechanisms are inwear market, driven by its place to ensure adherence tosuperior product
offerings and sustainability and compliancenetwork expansion. Artisanal norms. Our
commitmentbrand Jaypore continues to sustainable fashion andto thrive, driven by store
contribution to ESG goalsexpansions and significant highlights the Company senhancements
to its online dedication towards long-termplatform. value creation.
Outlook
India's dynamic economic growth, expanding middle class, and evolving consumer
behaviours create an exceptionally promising landscape for the retail industry. These
factors present significant opportunities for the fashion sector, as more consumers
increasingly view fashion as a vital form of selfexpression. Your Company's diverse
portfolio is uniquely positioned to capitalize on these trends, driving sustained growth
in the years ahead.
Driven by a strategic, brand- focused approach and an unwavering commitment to customer
satisfaction, your Company is powered by the talent, passion and dedication of its team,
all guided by a clear, forward-thinking vision. With these strengths, your Company is not
only prepared to build a strong leadership play but also to deliver exceptional value to
all stakeholders.
Conclusion
Your company's multidimensional achievements underscore what has been a foundational
philosophy of our group— that true corporate success is measured by the enduring
value we create for all our stakeholders. And that is our legacy, our promise, and our
future.
Yours sincerely,
Kumar Mangalam Birla
Chairman