Trent Ltd. share price target

EBITDA margins improved marginally by 20 bps YoY to 12.0% (I-direct estimate: 12.2%), mainly on the back of a decline in rental expense as a percentage to sales by 69 bps YoY. Subsequently, absolute EBITDA grew 21% YoY to | 71.0 crore (I-direct estimate: | 71.8 crore) Other income for Q1 came in at | 5.7 crore vs. | 16.0 crore in Q1FY18. This led to restriction of PAT growth. Consequently, PAT for the quarter stayed flat YoY at | 38.4 crore (I-direct estimate: | 47.3 crore) Key takeaways from AGM: 1) the management has chalked out...

ICICI Securities Ltd | Retail Equity Research 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 18 stores, the highest store addition historically in a single year), revenues from the Westside format grew robustly by 20% YoY in FY18. Westside has proven to have one of the most profitable business models as it primarily focuses on selling private label brands. Share of private label brands has improved significantly from 80% in...

ICICI Securities Ltd | Retail Equity Research Revenues for the quarter grew 18% YoY to | 528.7 crore vs. our estimate of | 540.4 crore. Results for the quarter include revenues from Zudio, which was acquired by the company with effect from October 1, 2017. For FY18, revenues of the Westside format grew robustly by 20% YoY with like to like (LTL) sales growth of 9% Gross margins improved 92 bps YoY to 50.3% while controlled operating expenses accelerated the improvement in EBITDA margins,...

Trent Limited is engaged in the retail sale of readymade garments. The Company's segments include Retailing and Others. It primarily operates stores across three formats: Westside, Star and Landmark. Westside offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories. It offers products in approximately 61 cities across over 108 stores. Star hypermarket and convenience store chain offers a range of products, including staple foods, beverages, health and beauty products, apparel, home...

Trent reported a healthy set of Q3FY18 numbers wherein revenues and EBITDA were above our estimates while PAT was below our estimates on lower than anticipated other income Revenue for the quarter grew 18% YoY to | 521.4 crore vs. our estimate of | 500.3 crore. The results for the quarter include revenues from Zudio that was acquired by the company w.e.f. October 1, 2017. Controlled operating expenses accelerated the improvement in EBITDA margins that expanded 220 bps YoY to 13.2% (I-direct...

ICICI Securities Ltd | Retail Equity Research Trent reported robust set of Q2FY18 results, wherein revenues were in line with our estimates, while profitability was above our estimates. Standalone revenues for Q2FY18 (which includes Westside and Landmark formats) grew by 19% YoY to | 522.1 crore vs. our estimate...

ICICI Securities Ltd | Retail Equity Research Standalone revenues for Q1FY18 (which includes Westside and Landmark formats) grew 25% YoY (up 10% QoQ) to | 499.2 crore (Idirect estimate: | 455.3 crore. LTL growth for Westside was at 14%. During the quarter, Westside opened three stores taking the total count (excluding closures) to 111 stores as on Q1FY18 Better inventory management has led to a 70 bps improvement in gross margins to 55% in Q1FY18 compared to 54.3% in Q1FY16. Moreover, controlled other operating expenses accelerated the...

Standalone revenues for Q4FY17, which includes Westside and Landmark formats, grew 19.7% YoY (up 5.6% QoQ) to | 454.1 crore (Idirect estimate: | 436.4 crore) Better inventory management has led to a 50 bps improvement in gross margins to 48.8% vs. 48.3% in Q4FY16. In addition to the same, a decline in other expenses to sales ratio (22.5% vs. 25.2% in Q4FY16) led to an expansion of 174 bps YoY in EBITDA margins to 3.1% (Idirect estimate: 2.4%). Subsequent to the steep improvement in EBITDA margins, absolute EBITDA nearly trebled to | 14 crore vs. | 5 crore in Q4FY16 (I-direct estimate: | 10.4 crore)...

BUY Trent Ltd between Rs. 235 - 266 for the target of Rs. 305 - 350

ICICI Securities Ltd | Retail Equity Research We recently met the management of Trent Ltd (Trent) to understand its business model and its future course of action. Trent's retail core business comprises West side and Landmark while it has JVs with Tesco and Inditex for Star Bazaar and Zara, respectively. Westside offers inhouse branded fashion apparels spread across 53 cities with 86 stores. Star Bazaar is Trent's hypermarket joint venture with British grocery & general merchandise retailer Tesco, which currently holds 50% in the JV. As on FY15, there are 18 Star Banner stores. Trent also has a JV with one...