Buy Trent; target of Rs 1550: Sharekhan

Sharekhan's research report on Trent

Trent delivered a mixed bag of numbers in Q4FY2023 with revenues growing by 75% y-o-y, while EBIDTA margin fell 264 bps y-o-y to 10.2% on normalisation of fixed cost (including rent) and change in inventory provisioning; PAT grew 40% y-o-y, led by strong revenue growth. Westside’s like-for-like growth stood at 23%; partially aided by impact of the Omicron COVID-19 wave in the base quarter. We expect SSSG of low-to-mid teens in the quarters ahead. With encouraging performance from new stores opened in the past 12 months and sustained double-digit like-for-like growth in Westside, revenue is expected to grow in double digits in the coming years.

Outlook

Stock currently trades at 25.4x/20.7x its FY2024E/25E EV/EBIDTA. We maintain Buy with an unchanged PT of Rs. 1,550.