Aditya Birla Fashion & Retail Limited has received a significant tax demand order from GST authorities, totaling ₹6.90 crores. The company disclosed this development through a regulatory filing under SEBI Listing Regulations on December 11, 2025.

Tax Demand Breakdown

The Joint Commissioner, Corporate Circle, Kanpur II, Uttar Pradesh issued the demand order dated December 9, 2025, following scrutiny proceedings. The financial impact is structured across multiple components:

Nature of Violations

The demand order addresses several GST compliance issues identified during the scrutiny process:

• Input Tax Credit Claims: Disputes over credit claims on grounds of vendor default in non-filing of returns
• Credit Note Disclosure: Disallowance of credit notes not disclosed in GSTR-1 returns
• Financial Reconciliation: Issues related to other income and expenses as per Annual Balance Sheet
• E-way Bill Compliance: Reconciliation discrepancies in e-way bill filings
• Trade Payables: Matters concerning trade payables as reflected in the Balance Sheet

Company's Response and Impact Assessment

Aditya Birla Fashion & Retail has maintained that the demand will not impact its financial, operational, or other business activities. The company's management believes the demand is not tenable under applicable law and has expressed intent to file a suitable appeal before the Appellate Authority.

The company acknowledged an unintentional delay in disclosure, stating the matter was reported swiftly once it was brought to the notice of appropriate company executives. This regulatory disclosure was made pursuant to Regulation 30 of SEBI Listing Regulations and related circulars.

Regulatory Compliance Context

The disclosure follows the framework established under SEBI Listing Regulations, specifically addressing requirements for material events that could impact investor interests. The company received the order on December 9, 2025, and disclosed it to stock exchanges within the prescribed timeframe following internal review processes.

Aditya Birla Fashion & Retail has reported a robust 13% year-on-year revenue growth to ₹1,982.00 crores in the second quarter of fiscal year 2026. The company's performance was marked by healthy like-to-like growth across key segments, underlining the strength and diversity of its business portfolio.

Financial Highlights

• Revenue: ₹1,982.00 crores (13% YoY growth)
• EBITDA: 7% growth with margins at 5.9% (compared to 6.2% in Q2 FY25)
• H1 FY26 Revenue: ₹3,813.00 crores (11% YoY growth)
• H1 FY26 EBITDA: ₹286.00 crores (24% YoY growth)

Segment Performance

Pantaloons

• Revenue: ₹1,142.00 crores (6% YoY growth)
• Like-to-like growth: 7%
• EBITDA margin: 13.7%

Ethnic Portfolio

• Revenue: ₹505.00 crores (11% YoY growth)
• Like-to-like growth: Over 20%
• EBITDA margin: 200 basis points YoY expansion

Luxury Retail

• 13% YoY growth

TMRW (Digital Brand Portfolio)

• 27% YoY growth

Key Developments

1. New Brand Launch: Aditya Birla Fashion & Retail introduced OWND!, a Gen Z focused brand, opening its first store in Bengaluru.

2. Galeries Lafayette Partnership: The company unveiled its first India store in Kala Ghoda, Mumbai, spanning 90,000 square feet.

3. TMRW Funding: Successfully raised ₹450.00 crores during the quarter.

4. Ethnic Business Growth: The designer-led portfolio grew 32% YoY, with Sabyasachi and Goodview (Tarun Tahiliani) delivering 39% and 26% like-to-like growth, respectively.

5. Tasva Expansion: Posted 58% YoY revenue growth and achieved its fifth straight quarter of double-digit like-to-like growth at 38%.

6. TCNS Turnaround: Delivered strong like-to-like growth of 19% with a notable improvement in profitability.

Strategic Initiatives

Aditya Birla Fashion & Retail is focusing on several strategic initiatives to drive growth and profitability:

1. Pantaloons Revamp: Implementing a new retail identity and increased marketing investments to enhance brand positioning.

2. Ethnic Portfolio Expansion: Continuing to invest in designer-led brands and premium ethnic wear.

3. Digital Growth: Strengthening the omni-channel presence of digital brands under TMRW.

4. Luxury Segment: Expanding the luxury retail footprint with partnerships like Galeries Lafayette.

Outlook

Despite a challenging consumer environment, Aditya Birla Fashion & Retail has demonstrated strong and broad-based growth across segments. The company's strategic initiatives in brand building, partnerships, and retail excellence are expected to continue driving sustainable, profitable growth in the coming quarters.

Management remains confident about the company's trajectory, with expectations of improved performance in the second half of the fiscal year, particularly in the ethnic wear segment due to the wedding season.

Financial Position

As of September 2025, Aditya Birla Fashion & Retail held gross cash of ₹2,150.00 crores at the consolidated level, indicating a strong financial position to support its growth initiatives.

In conclusion, Aditya Birla Fashion & Retail's Q2 FY26 results reflect the company's resilience and strategic focus on diverse fashion segments, positioning it well for future growth in the Indian retail market.