I want to value a company with multiple segments that are different in nature, What should be the method I follow for this valuation?
I am currently valuing a company called ABFRL with 4 different segments. The segments are:
- Value & Masstige Retail – e.g. Pantaloons
- Ethnic – multiple brands/businesses with different growth, margins, LTL and market shares
- Luxury Retail – The Collective and other luxury businesses
- TMRW – high-growth, digital-first/emerging brands, currently in the investment phase
Given the differences in growth, margins and maturity, I’m thinking SOTP (Sum-of-the-Parts) is more appropriate than valuing the company on a single P/E or EV/EBITDA multiple.
How do I value a company like this with vastly different segments and what are the important metrics to consider while valuing an apparel company. Would appreciate any guidance, if you have any resources to recommend please do that as well.