Buy Trent; target of Rs 1330: ICICI Direct

ICICI Direct's research report on Trent

Trent is India’s leading retailer with a presence across various consumer categories (400+ stores). Inherent strength of brands (Westside, Zudio, Star, Zara) and accelerated store additions has led Trent to be among the fastest growing companies in our retail coverage universe. Westside’ (75% of revenues) has proven to be one of the most profitable business models as it primarily focuses on selling private label brands (EBITDA margin: 11%, consistent SSSG: 8-9%) ‘Zudio’ (22% of sales), the value fashion brand, continues to be the next leg of growth for Trent (revenue CAGR: 50% FY18-21)

Outlook

Robust performance during challenging times and industry leading performance will continue to warrant premium valuations to Trent. Hence, we maintain our BUY rating on the stock We value Trent at Rs 1330 based on SOTP valuation