Sharekhan's research report on Trent
Q4FY2022 was a mixed bag with strong y-o-y revenue growth of 53% (63% growth over Q4FY2020) to Rs. 1,185.3 crore, while margins declined y-o-y (gross margins fell by 405 bps while EBITDA margins fell by 480 bps). PAT grew by 32% y-o-y to Rs. 75 crore. Like-for-like (LFL) sales grew by 21% y-o-y in Q4FY22 and 16% compared with Q4FY2020. Sales through online platform grew by 85% in Q4. The company operated 200 Westside stores and 235 Zudio stores (total 435 fashion stores) as on March 31, 2022. With strong liquidity, store additions are expected to be strong in the coming years. Strong momentum in LFL sales and store expansions will help Trent’s revenues and PAT to clock CAGR of 33% and 57% over FY2022-24E.
We maintain a Buy on the stock with a revised price target of Rs. 1,415.
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