Trent’s Q2 revenue rose 39.6% YoY to Rs 4,035.56 crore but was below the estimate of Rs 4,320 crore.
In Q2FY25, its fashion segment registered double-digit like-for-like growth. Emerging categories, which contribute to over 20% of its revenues, like beauty & personal care, innerwear and footwear continued to gain traction with customers.
As of September-end Trent’s store portfolio included 226 Westside, 577 Zudio and 28 stores across other lifestyle concepts.
Post the second quarter results of the company, here is what analysts say:
Bernstein: Outperform| Target price: Rs 8,100
Bernstein maintained an Outperform rating on Trent with a target price of Rs 8,100 Q2FY25 results were a miss, but the story stays intact. The company saw a slower store addition but recovery seems to be underway. There was a positive surprise in the EBITDA margin. SSSG and measured expansion were the positives. The company highlighted its new growth avenues like Westside Pome, Zudio Beauty and Zudio International.
Morgan Stanley: Overweight| Target price: Rs 8,032
Morgan Stanley maintained an overweight call on Trent with a target price of Rs 8,032 Q2 saw a modest revenue miss but margins were beaten.
Strong trends remain intact in a weak backdrop. The companyβs Fashion EBITDA margins at 15.9% beat Morgan Stanleyβs estimate of 14.5%. Star business saw 27% revenue growth, with 14% LFL growth and two store additions in the quarter.
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Nuvama: Buy| Target price: Rs 7,475
Nuvama maintained its buy rating on Trent with a revised target price of Rs 7,475, up from an earlier Rs 7,136
For the first time since Q4FY21, Trent has posted sub-50% growth in Q2FY25 owing to the closure of 25 stores (16 Zudio, 9 Westside). Even so, revenue growth stays industry-leading at 40% YoY. EBITDA margin held stable YoY driven by higher productivity. Store addition in H1FY25 was muted, although addition in Zudio has picked up in Q3 (at the run rate of a store a day). Star continues to report a healthy performance driven by strong LFL growth (+14% YoY).
Motilal Oswal: Buy| Target price: Rs 8,200
Trent continues to buck the trends, with strong double-digit LFL growth and robust store area additions, despite a weak discretionary demand. Trentβs industry-leading growth, driven by healthy SSSG, store productivity, and robust footprint additions, along with the scale-up of Zudio and newer categories (Beauty, Lab-grown diamonds), offer a huge runway for growth over the next few years. Further, the companyβs focus on ramping up Star (currently 74 stores in 10 cities) through fresh and its own brands, provides an additional growth driver in the grocery segment.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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