Trent Ltd. share price target

With a 13% upside potential from the CMP we maintain our BUY rating on the stock.

Trent delivered its best-ever performance in tough time. The result was an outlier in the overall sector. Zudio’s expansion- and execution-driven success is impressive. 10% SSSG is highest in the sector vs -1% to -18% SSSG for other apparel companies in 2Q.

Trent has outperformed yet again with strong beat in a difficult quarter in terms of demand and lower discretionary spending. Trent has registered a stellar consolidated revenue growth of 46% YoY to ? 2,628 Cr, a 25% EBITDA growth and 45% PAT growth on YoY basis.

TRENT continues to consistently (eight consecutive quarter) deliver best-in-sector quarterly performance at all levels (revenue, LFL, retail expansion, operating profit). LFL at 12% is highest in the apparel sector. Retail expansion rate (40% YoY) continues to inspire confidence in the relative success of the Zudio franchise.

Company Outlook & Guidance: We maintain our BUY recommendation as we increase our FY24/25 estimates marginally

Trent delivers yet another consistent quarter and continues to outperform its peers despite headwinds from the macro demand environment, majorly driven by robust expansion. Westside portrayed strong growth with SSSG at 23%, maintaining its market position, while Zudio continued to sway with healthy scale up of stores and revenue.

Trent continues to outperform peers on most parameters (LFL revenue, retail expansion, operating profit). This is the seventh consecutive quarter of outperformance. LFL revenue growth for Westside continues to be impressive while retail expansion rate of Zudio (> 50% YoY since last two years) instills confidence in relative success of the franchise in value segment (~Rs500 ASP).

Recommendation With a 23% upside potential from the CMP, we maintain our BUY rating on the stock.

Trent continued to report stellar growth in its Topline numbers with Revenue up by 17.96% QoQ and 53.65% YoY as of Q3 FY23. Westside saw a handsome growth in LFL by 17% YoY on the back of increased footfalls along with strong growth across emerging categories (Beauty, Innerwear, Footwear and personal care products).