659.20 -11.55 (-1.72%)
NSEJan 27, 2021 03:31 PM
The 13 reports from 5 analysts offering long term price targets for Trent Ltd. have an average target of 663.75. The consensus estimate represents an upside of 0.69% from the last price of 659.20.
|Summary||Date||Stock||Broker||Price at Reco.||Target||Price at reco|
Change since reco(%)
|2020-11-09||Trent Ltd. +||Axis Direct||681.25||786.00||681.25 (-3.24%)||Target met||Buy|
We believe Trent is best placed to bounce back post COVID-19 pandemic, driven by its success in Westside' concept (exclusive brands at competitive prices), ramp up of value fashion format Zudio', sustainable margins (led by superior store metrics
|2020-11-06||Trent Ltd. +||ICICI Securities Limited||674.20||785.00||674.20 (-2.22%)||Target met||Buy|
ICICI Securities Limited
With the current unprecedented scenario various retailers have significantly curtailed their store expansion guidance for FY21E. However, Trent is among the few retailers who has reiterated their stance of aggressively adding stores. In H1FY21, it added 11 additional stores (eight Zudio, two Westside, one Landmark). We expect store addition momentum to accelerate in H2FY21E. On b/s front, better inventory management has led to working capital release of | 165 crore in H1FY21. Also, capex requirements were lower in H1FY21 (| 21.1 crore vs. | 81.0 crore). Negative...
|2020-09-28||Trent Ltd. +||Axis Direct||665.70||786.00||665.70 (-0.98%)||Target met||Buy|
|2020-08-14||Trent Ltd. +||ICICI Securities Limited||566.05||680.00||566.05 (16.46%)||Target met||Buy|
ICICI Securities Limited
As expected, Trent reported a washout Q1FY21. High store concentration in worst hit Coivd-19 states (~ 17%, 16% of Westside, Zudio stores in Maharashtra) and higher presence in malls (~50% for Westside, 25% for Zudio) further hampered store operations due to stringent measures by local authorities. Subsequently, the company reported revenue de-growth of 87% YoY to | 96.3 crore (April: 0%, May: 8%, June: 32% pre-Covid sales YoY). The company made provisions worth | 40 crore towards inventories that led gross margins to contract substantially to 13.3% vs. 53% in Q1FY20....
|2020-07-23||Trent Ltd. +||Motilal Oswal||577.45||620.00||577.45 (14.16%)||Target met||Neutral|
23 July 2020 Trents consolidated revenue/PAT grew 33%/9.2% to INR34.9b/INR1.1b in FY20. Standalone revenue growth of 26% was led by strong performances from Westside (+16%) and Zudio its freshly established Value Fashion Retail brand (+2.5x, 16% contribution). The brands were supported by strong same-store sales growth (SSSG) and store adds. A) Indias Retail industry ranks among the top 5 retail markets globally (consumer category targeted by Westside). B) Value Fashion accounts for ~75% of the market (consumer category targeted by Zudio). These three factors underscore TRENTs growth levers. The company revealed that 70 stores had resumed operations on the easing of the COVID-19-led lockdown, but our channel check suggests >200 stores (~80%) are now operational. Auld who has led Trent for the last 10 years), and b) (formerly served as Chief Commercial Officer). Westside reported 16% YoY revenue growth in FY20, driven by a 15% rise in the no.
|2020-05-26||Trent Ltd. +||HDFC Securities||459.55||459.55 (43.44%)||Results Update|
We maintain our ADD RECO with an SOTP-based TP of Rs. 460/sh (earlier: Rs. 490/sh). FY21/22 EBITDA cuts aren't comparable as we have moved to IND-AS 116 accounting. FY20 was all about treading the Gross margin dilution-cost savings equation successfully Signed, sealed and delivered. Std. revenue grew 25.5% YoY (Highest in universe). Trents flagship - Westside grew by 17% YoY (SSSG: 7.3%) in FY20. (YTD Feb-20 SSSG: 12.6%). Zudio lived up to the hype. Zudios revenue is estimated to have breached Rs. 4bn+. While GMs declined 180bp to 49.5% given the increasing skew of Zudio in mix, the retailer has been smartly using Zudio+Westside supply chain savings to invest in sharper pricing and still protect EBIT margins. Cost of retailing is estimated to have come down by ~360bp YoY in FY20. Adj. EBIT stood at 7.2% for FY20.
|2020-05-25||Trent Ltd. +||ICICI Securities Limited||459.55||560.00||459.55 (43.44%)||Target met||Buy|
ICICI Securities Limited
The Covid-19 pandemic had an unprecedented impact on retail industry, forcing temporary closure of physical stores from mid-March onwards in India. The same materially impacted Trent's performance in Q4FY20. In the apparel space, Trent has been a consistent outperformer with robust revenue growth (30%+ growth in previous three quarters). However, the revenue trajectory got de-railed significantly in Q4FY20. Standalone revenues (including Westside, Zudio formats) grew 8.1% YoY to | 722.8 crore in Q4FY20. The management highlighted that for January-February,...
|2020-05-25||Trent Ltd. +||IDBI Capital||459.55||464.00||459.55 (43.44%)||Target met||Hold|
Trent reported better than expected topline. SSSG and revenue growth were on strong trajectory during Jan'20 and Feb'20. However, Mar'20 witnessed steep decline in revenue (-42% per our estimate). Positively, c. 88% standalone stores are now operational. However, c. 70% stores are in mall which is expected to take some more time (by June'20) to resume operations. Superior control over inventory (100% stores company operated) and robust supply chain, strongly positions Trent to equip their stores with fast selling essential-inventories (this will drive better store through-put). Considering last 56 days (c. 15% of annual no. of days) complete shutdown of all the...
|2020-05-25||Trent Ltd. +||Motilal Oswal||459.55||610.00||459.55 (43.44%)||Target met||Buy|
Jan-Feb20 revenues grew ~33% YoY, highlighting strong performance in the pre COVID-19 period. We have cut our standalone FY21E/FY22E revenue estimates by 10%/9% due to the prolonged lockdown. 4QFY20 standalone revenue grew 8% YoY to INR7.2b (4% above est.), despite the lockdown in Mar20. Revenues in Jan- Feb20 grew 33%, which implies ~42% decline in the Mar20 (according to our calculations). Revenues were driven by Westside, which saw flattish sales at INR6b whereas Zudio revenues grew ~110% YoY to INR1.1b (according to our working), reflecting strong revenue growth in the pre COVID-19 era. Standalone EBITDA was at INR929 (up 175% YoY) due to Ind-AS 116 impact. Ind-AS 116, EBITDA declined ~90% YoY to INR29m, due to higher rent expense. Standalone PBT declined to INR67m (64% YoY). Pre-Ind-AS 116, PBT stood at INR104m (down 43% YoY), which was supported by higher other income.
|2020-02-09||Trent Ltd. +||HDFC Securities||662.55||580.00||662.55 (-0.51%)||Target met||Neutral|
While execution remains top-notch, Trent seems priced to perfection with little on the table for investors at 33x FY22 EV/EBITDA. That said, we revise EBITDA estimates upwards by 4-5% for FY21/22 primarily to factor in lower cost of retailing. This coupled with our DCF roll-over for standalone biz and Zara to FY22 bumps up our SOTP-based TP to Rs. 580/sh (earlier Rs. 490). We bake in 28/30/41% revenue/EBITDA/PAT CAGR and a 440bp improvement in RoIC (ex-investments in JVs/subsidiaries over FY19-22E. Maintain NEUTRAL. Westsides clockwork-like growth continues. Trents flagship format grew 22% YoY in 9MFY20. SSSG came in at 12% - healthiest within our retail universe. We estimate Zudio to have more than doubled top-line over 9MFY20, however, we suspect productivity may have dipped. Gross margin continues to dip as 1. Zudios skew increases in the revenue mix. Share in JV/associate losses have increased over 9MFY20. While the Westside format remains a winner in terms of unit store economics; the same for Zudio is yet to be tested in catchments without a corresponding Westside store as currently the former piggybacks on the supply chain of Westside.
|2020-02-07||Trent Ltd. +||IDBI Capital||662.55||573.00||662.55 (-0.51%)||Target met||Hold|
Trent has reported above expected result during 3QFY20. SSSG at 12% for 9MFY20 (c. 10.5% in 3QFY20) compared to 5% SSSG in Pantaloons for 3QFY20 and 2% SSSG in TCNS is extremely positive. Decline in gross margin is led by rise in the revenue share of the value fashion format Zudio. PBT on like to like basis rose significantly due to higher other income. Trent continues to out-perform competition over past several quarters. We have revised our SSSG assumptions and EPS estimates upward based on 9-M actual performance. We expect Trent to continue outperform other apparel retailers in India led by disruptive pricing and superior business model. Based on recent run-up in the stock...
|2020-02-07||Trent Ltd. +||ICICI Securities Limited||695.75||725.00||695.75 (-5.25%)||Target met||Buy|
ICICI Securities Limited
Westside continues to be one of the most successful, established franchises, deriving 97% of share of revenues from private label brands. Over the last six years, Westside has sustained its same stores sales growth at 7%+, outperforming peers in the industry. Exceptional ramp up in store addition in non-metro cites, mainly through Zudio format (value fashion business) is one of the major growth drivers in coming years. Robust performance in a challenging scenario instils confidence in the business model, which would enable the company to command premium valuation multiple on a...
|2020-02-06||Trent Ltd. +||Motilal Oswal||662.55||700.00||662.55 (-0.51%)||Target met||Buy|
Maintain Trents revenues were up 33% YoY to INR8.7b (in-line), led by strong performance of Westside stores that witnessed an impressive 22% YoY revenue growth and 10% SSSG, considering other retailers are facing the Post Ind-AS116, PAT was up 38% YoY to INR557m, while pre Ind-AS116 PAT was up 60% YoY to INR645m (7% beat). Thus, 3QFY20 SSSG stands at ~10%, witnessing strong traction in a weak Zudios revenues are estimated at 2.3x YoY to ~INR1.14b, now contributing 13% of the total standalone revenues (up from 5% in 3QFY19), led by fast Our SOTP-based TP of INR700 values Westside and Zara at 30x EV/EBITDA and Star at 2x EV/sales on FY22E.
|2019-11-22||Trent Ltd. +||Motilal Oswal||503.20||605.00||503.20 (31.00%)||Target met||Buy|
22 November 2019 The Zudio store and products have a trendy look and feel, offer only casual wear (no formals) and is targeted at young value-seeking consumers. The lower pricing has also been possible due to (a) passing-on of low gross margin benefits (~30% v/s Westsides 55%), and (b) no marketing costs (in line with Westside). Given the low gross margins, Zudios success lies in its strong turnover revenue/sqft of ~12-15k/sqft (v/s industry average of INR8-10k/sqft). Zudios high fashion appeal and sharp pricing has led to an encouraging store operating metrics. Therefore, a franchisees capex is INR15-20m for a store size of 6k sqft; in turn, a franchisee receives a fixed revenue share, while the company operates the store and retains the profitability. Typically, franchisees get ~16% revenue share and 12-15% IRR, while the company garners strong ROCE on merely one-month inventory capital.
|2019-11-08||Trent Ltd. +||IDBI Capital||516.35||541.00||516.35 (27.67%)||Target met||Hold|
Overall result has been in line with our estimates. Westside continues to outperform its competitors based on strong same store sales growth performance during a period when consumption slowdown is at its peak. Decline in gross margin has been due to higher discount during end of season sale and increase in revenue share from Zudio. This is not too concerning as Trent, unlike branded retailers, is able to follow strict discounting policy; 2 months a year. Gross margin dilution coming from Zudio should not have significant spill-over EBITDA margin dilution impact. This is because, in value retailing its always high inventory turn (and not gross margin) which helps to build on...
|2019-08-02||Trent Ltd. +||ICICI Securities Limited||443.15||500.00||443.15 (48.75%)||Target met||Buy|
ICICI Securities Limited
We recently attended Trent's annual general meeting (AGM). The key takeaways are; 1) robust store addition plans in FY20 (100+ stores between Westside and Zudio), 2) outlaid capex of ~| 350-400 crore (~2x FY19), 3) opened its first exclusive store of its own ethnic brand, Utsa', 4) plans to raise additional capital worth | 600 crore in the next three to six months, 5) focus on enhancing share of private label brands for Star format with adoption of new pricing strategy to become more competitive, 6) adjusting for Ind-AS 116, EBITDA margins for Q1FY20 expanded 60 bps YoY to 12.6%...
|2019-08-01||Trent Ltd. +||ICICI Securities Limited||421.20||500.00||421.20 (56.51%)||Target met||Buy|
ICICI Securities Limited
The expected capital infusion (| 950 crore) by the promoters is likely to act as a key catalyst for healthy revenue growth. The capital to be raised can provide a strong fillip to store addition pace. A substantial amount is also expected to be invested in enhancing warehousing capacity and supply chain. We maintain our estimates and expect revenues to grow at a CAGR of 23% in FY19-21E with EBITDA margin expansion of 140 bps to 10.1% by FY21E. We have not incorporated Ind-AS 116 impact on financials due to lack of data. Robust performance in a challenging scenario instils confidence...
|2019-08-01||Trent Ltd. +||Motilal Oswal||421.20||470.00||421.20 (56.51%)||Target met||Buy|
Revenue growth healthy; PAT supported by other income: Standalone revenue increased strongly by 30% YoY, led by healthy 21% growth in Westside sales. EBITDA was up 130% at INR1.6b on account of Ind-AS 116 reclassification we, however, believe that this number makes limited sense in the absence of any company-provided reconciliation. Reported PBT was up 50% YoY at INR865m (INR85m/9% impact due to Ind-AS 116). On a preInd-AS 116 basis, PBT would have been INR950m (+62% YoY; 32% beat). PAT (post Ind-AS 116) was up 51% YoY at INR579m (23% beat), mainly led by significantly higher other income (+6x YoY to INR359m)....
|2019-07-10||Trent Ltd. +||Motilal Oswal||435.00||500.00||435.00 (51.54%)||Target met||Buy|
10 July 2019 Westside is a well-oiled business format with a right product proposition, pricing and favorable store economics. It now plans to replicate Westsides success in Zudio, which will have competitive pricing and value products targeted at the youth. Against this promising backdrop, the company targets to double its store count potentially in three years (adding 60 stores). Subsequently, we have revised our store addition estimate for Westside/Zudio to 35/40 annually v/s 23/25 earlier. Keeping in mind its ambitious plans and accelerated growth, the company has announced equity fund raising plans of INR15.5b in end-June. calculations, Westside garners mid-teens RoCE, but the upcoming investments in scaling up both Westside and Zudio may keep the return profile in single- digits. Further, we expect RoIC to languish at ~10% in FY20E, but believe it will recover to healthy mid-teens level over the next 2-3 years on (a) Zudio driving scale benefits, (b) accelerated store addition, and (c) backend synergies.
|2019-07-08||Trent Ltd. +||ICICI Securities Limited||426.60||500.00||426.60 (54.52%)||Target met||Buy|
ICICI Securities Limited
Westside continues to be one of the most successful, established franchises in the women's wear category. With steady same store sales growth (8%) and aggressive store addition (added 25 stores: highest store addition historically in a single year); revenues from the Westside format grew robustly by 17% YoY in FY19. Private label brands continue to dominate the product portfolio with the share now touching 97% (from 80% in FY13). On the profitability front, gross margins for Westside format declined 210 bps YoY to 57.9%, mainly owing to price rationalisation in selected categories of...