Trident shares rally 7% as Q1 net profit climbs 90%; lower expenses, input costs help

Trident shares have risen 20 percent in the last three months.

Shares of Trident Ltd. climbed as much as 7 percent to Rs 33.66 in morning trade on Friday, July 25, after the home textiles and paper products manufacturer posted a sharp jump in quarterly profit, brushing aside a slight dip in revenue.

The company’s net profit surged 89.7 percent year-on-year to Rs 140 crore in the April–June quarter, compared to Rs 73.8 crore a year ago. This improvement came even as operating revenue slipped 2.1 percent to Rs 1,706.8 crore.

Follow our LIVE blog for all the latest market updates

What drove the stellar profit growth was a meaningful cut in expenses — down about 7 percent from last year — which helped lift margins. Trident’s EBITDA rose 29.3 percent to Rs 291 crore, and its operating margin expanded to 17 percent from 12.9 percent in the same period last year.

Trident, which supplies home textiles to global retail giants like Walmart and Target, also appears to be benefiting from more stable input costs. Cotton prices, which were a drag on margins last year amid an 18 percent surge, have softened in recent months, offering some relief as far as raw material costs are concerned.

Also read: India‑UK FTA tariff cuts sparks cautious optimism, focus to shift to execution and earnings

In other news, the board has also cleared a proposal to raise up to Rs 500 crore through the issuance of Non-Convertible Debentures (NCDs) via public or private placement, in one or more tranches, subject to shareholder approval.

In today's session, volumes saw a massive surge as 5 crore shares changed hands, significantly higher than the one month and one week average of 96 lakh shares.

At about 9:45 pm, shares of the company were trading at Rs 33.4, higher by 6 percent from the last close on the NSE. Trident shares have risen 20 percent in the last three months.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.