ICICI Securities research report on Trent
Trent’s Q4FY22 revenue of Rs11.9bn (up 53% YoY) was ahead of our / consensus estimates, while EBITDA of Rs1.52bn was below our expectation owing to higher costs. In Q4, Westside format registered LFL growth of 16%/21% over FY20/FY21, respectively. In FY22, the company added 125+ new stores, taking the total store count to 200 for Westside and 236 for Zudio stores. Net cash declined from Rs4.3bn to Rs650mn despite OCF generation of Rs2.9bn due to Rs4bn working capital requirements, Rs2bn capex and net (of dividend) investments of Rs0.5bn in subsidiaries.
Outlook
Factoring higher than expected Zudio store additions, we raise our FY22-23E pre Ind-AS 116 EBITDA by 5-10%. We raise our DCF-based target price to Rs1,430/sh (earlier: Rs1,250/sh). Maintain BUY, given the company’s strong track record of execution.
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