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News: Trent net revenues grew by 37%yoy to Rs453.7crore (grew by 45% on 2 years CAGR basis). Like-for-like (LFL) growth stood in high single digit. The company added 76 new stores on compared to Q2 (including 58 Zudios stores). Total area stood 12.6mn sq.ft, increased by 3.6mn sq.ft on y-o-y basis (40% increase on y-o-y basis). As per our calculation Avg. revenue per sq.ft stood at Rs4,467.7 per sq.ft vs. Rs4078.8 per sq.ft (grew by 5% on QoQ basis). Gross margins decreased by 124BPS yoy to 44.7% (improved by 51BPS on QoQ basis). We believe decline in the gross margins is due to change in mix with contribution of Zudio’s scaling up. EBIDTA margins stood flat at 18.5%. EBIDTA grew by 34%yoy to Rs837.6crore. Reported PAT grew by 36.6%yoy to Rs469.3crore (lower than street expectation of Rs514crore). Depreciation grew by 52%yoy to Rs239.3crore due to large number of stores added during the quarter.
View: Overall, Trent’s operating performance was largely in-line with expectation with 30%+ growth in revenues and EBIDTA margins of 18.5%. LFL growth stood in high single digit was better compared to other large peers. The company has maintained its strong store addition with 76 new stores added during the quarter. Stock has corrected by 37% from its recent high. Trent is one of the better play in the value-retail space with strong store expansion strategy and efficient business model.
Impact: Neutral