Sharekhan's research report on Trent
Q1FY2023 saw a strong 5.1x y-o-y revenue growth driven by better consumer sentiments with EBITDA and adjusted PAT at Rs. 304.1 crore and 123.1 crore, respectively against a loss in the corresponding quarter last year. Gross margins fell 425 bps y-o-y impacted by higher raw material prices. Emerging categories such as beauty and personal care, innerwear and footwear continued to witness strong momentum and now contribute to over 15% of company’s standalone revenues. With encouraging performance from new stores opened in the past 12 months, the company aims to double down on the growth agenda over the medium term.
Strong momentum in like-for-like (LFL) sales and store expansions will help revenue and PAT to clock CAGR of 43% and 72% over FY2022-24E. We maintain a Buy on the stock with a revised price target of Rs. 1,545.
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