ICICI Direct's research report on Trent
Trent is India’s leading retailer with a presence across various consumer categories (550+ stores). Inherent strength of brands (Westside, Zudio, Star, Zara) and accelerated store additions have led Trent to be among the fastest growing companies in our retail coverage universe. Westside’ (70% of revenues) has proven to be one of the most profitable business models as it primarily focuses on selling private label brands (EBITDA margin: 11%, consistent SSSG: 10%+) • The next leg of growth for Trent continues to be from ‘Zudio’ (30% of sales), the value fashion brand, (revenue CAGR: 72% in FY19-22).
Robust performance during challenging times and industry leading performance will continue to warrant premium valuations for Trent. Hence, we maintain our BUY rating on the stock. We value Trent at Rs 1730 based on SOTP valuation.
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