Buy Trent; target of Rs 1750: Sharekhan

Sharekhan's research report on Trent

Q2FY2023 saw a strong 78% y-o-y revenue growth driven by higher footfalls with EBITDA and adjusted PAT at Rs. 267.5 crore and Rs. 185.9 crore, respectively. Gross margins and EBIDTA margins fell by 515 bps y-o-y and 693 bps y-o-y (to 14.8%). Emerging categories such as beauty and personal care, innerwear and footwear continued to witness strong momentum and now contribute to over 15% of the company’s standalone revenues. With encouraging performance from new stores opened in the past 12 months and strong like-for-like growth in the Westside brand; the revenues are expected to grow in double digits in the coming years.

Outlook

Strong momentum in like-for-like (LFL) sales and store expansions will help revenue and PAT to clock CAGR of 38% and 65.4% over FY2022-25E. We maintain a Buy on the stock with a revised price target of Rs. 1,750.

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Trent - 14 -11-2022 - khan