Trent Ltd. share price target

Zudio' (22% of sales), the value fashion brand, continues to be the next leg of growth for Trent (revenue CAGR: 50% FY18-21) Q2FY22 Results: Trent delivered a blockbuster quarterly performance with significant beat on our/consensus estimates across all fronts. While revenue recovery rate was expected to reach close to pre-Covid levels, Trent reported its...

TRENT saw a strong recovery in revenue (beating our estimate, up 2.3x YoY, and 25% above pre-COVID or 2QFY20 levels) on the back of a 46% addition in its store footprint. On a LTL basis, sales came in ~20% below pre-COVID levels. Westside/Zudio grew 3%/3x from its pre-COVID base. EBITDA/PAT saw a strong 67%/3.3x jump from pre-COVID levels. Despite revenue being below pre-COVID levels on a LTL basis, margin has been much better. Zudio has grown 3x in the last two years, despite the impact of the COVID-19 outbreak, and is expected to contribute over onethird by FY23E. We have largely maintained our FY23 estimate, factoring in...

We maintain our SOTP based TP to Rs 990 (Rs 790, previously) and maintain our current rating to HOLD given the negative impact of the second COVID-19 wave leading to lockdowns across states.

On track to achieve rapid revenue recovery. consumer categories (400+ stores). Inherent strength of brands (Westside, Zudio, Star, Zara) and accelerated store additions has led Trent to be among the fastest...

Minimised discounting with lower EOSS days in FY21 (gross margin for Zudio, Westside improved 100 bps, 150 bps YoY to 40%, 58%, respectively What should investors do? Trent has been an exceptional performer with the...

Since the acquisition in FY18, revenues from value fashion brand Zudio, have grown from | 144 crore to | 507 crore as on FY20, translating into robust CAGR of 88%. Despite a washout in Q1FY21 (revenue decline by 80% YoY), Zudio displayed a resilient show from H2FY21 onwards. The like for like (LFL) recovery rate got enhanced sharply to 91% in Q3FY21 and 100% in Q4FY21. Revenue decline was restricted to 5% YoY at | 480 crore in FY21. The fact that Zudio is not promoted as Westside or a Tata brand signifies the inherent strength of the business model. Given the scalability of the brand...

We maintain our SOTP based TP to Rs 790 (Rs 780, previously) and change our current rating from BUY to HOLD given the negative impact of the second COVID wave leading to lockdowns across states.

TRENT posted a 7% YoY revenue increase (7% beat), supported by easing restrictions and improving customer traction over JanFeb'21. EBITDA grew 47% YoY on a lower base, aided by high gross margins. The gradual recovery seen after nine months of lockdown has once again been derailed due to the second COVID wave. Thus, we revise down our FY22E revenue/EBITDA estimate by 26%/44%, but largely maintain FY23 estimates factoring in recovery, coupled with the ongoing steady pace of...

We retain our SOTP based TP of Rs. 786. Maintain BUY.

While revenue fell 17% YoY (in line), EBITDA saw a massive 26% beat on gross margin (GM) improvement of 570bp, benefiting from a provision write back of INR140m (190bp gain) and potential reduction in discounted sales. Adjusting for write-backs, EBITDA fell 4% YoY (16% beat). Its historic, industry-leading growth should resume in FY22 as aggressive store additions have already resumed. We have raised our FY22E EBITDA...