- 28 Apr 2022
- ICICIdirect Research
Trent delivers mixed operational performance
TRENT - 7159 Change: -11.90 (-0.17 %)News: On a favourable base, Trent’s revenue grew 53% YoY to Rs 1185.26 crore (I-direct estimate: Rs 1145.0 crore). During Q4FY22, the company reported gross margins of 49.1% (down 405 bps YoY), which was lower than our expectations of 50.9%. Lower rental waivers despite disruptions and higher opex (employee and other expenses grew 48% and 59% YoY, respectively) resulted in EBITDA margins declining by 480 bps YoY to 12.9% (I-direct estimate: 17.6%). Absolute EBITDA grew 12% YoY to Rs 152.3 crore. The company reported higher other income worth Rs 102 crore on account of dividend income from subsidiary, investment income and rental waivers. Subsequently, PAT grew by 32% YoY to Rs 74.9 crore (I-direct estimate: Rs 64.5 crore)
Views: Trent reported a mixed operational performance in Q4FY22. Revenue trajectory continued to be robust despite various challenges, however profitability was lower than our estimates owing to higher opex on new store additions. Online channel continued its strong pace, despite stores re-opening. Online sales grew 74% in FY22 with share increasing by 200 bps YoY to 7%. Its flagship store ‘Westside’ is now trading at an annual revenue run-rate of over Rs 5000 crore (FY20 revenue: Rs 2800 crore) and commands encouraging market presence and traction. The management highlighted that from March margins have recovered materially and are trending close to Q3FY22 levels (21-22%)
Impact: Neutral