When Trent Limited announced the results for three months ended September, it first marked several quarters that the standalone revenue growth fell below 50% year-on-year. This trend continued in the December quarter (Q3Fy25), with revenue 4,535 crore, represents an increase of about 37% in Q2 below 40%.
Moderating growth, with steep assessment, weighed on investor spirit, Pushing the stock down About 35% of its 52-week high 8,345 Viewed on 14 October. Recently, investors are worried about the impact of the launch of Shin India app by Reliance Retail on 1 February.
This shows the return of online fast fashion retailer Shin after about five years after the ban. While the exact impact of this development on Trent will be clear on the coming quarters, this increases the competition in the sector.
For now, despite the development moderation, Trent’s sales performance is still strong between the company’s store consolidation and general weakness in consumer feelings. In a report on 7 February, analysts of Kotak Institutional Equities wrote, “While the trajectory of recent results has been weaker than the past, we hope that Trent will continue to perform better than his peers.”
Also read: Behind Trent’s trend-defying performance
Is the trendy enough?
Trent’s fashion concepts saw the development in the Q3, which was soft than the growth of double digits seen in Q2. It was operated on 31 December with a footprint of over 11 million square feet in its fashion brands, 33% a year ago.
Trent opened 12 Westnets and 58 Jadio stores (including one in Dubai) on a pure basis in Q3. The Westside Company has a fashion retail stores chain and Judio is its value fashion format. Trent’s store portfolio included 238 Westside, 635 Judio and 34 stores on 31 December. Trent’s store portfolio optimization strategy involves upgrade or integrate of small footprint stores with new stories in more attractive subtle markets.
Regarding profitability, the gross margin contracted the 124 basis points (BPS) up to 44.7%year-on-year. Analysts of Kotak believe that it can be attributed to a high mixture of sales from the Judio and possibly a high ratio of franchise stores. “High franchise stocks have been shown at a slow pace with year-to-year increase in operating expenses (rent, employees and other expenses),” the Cotac report said. 34 BPS relatively small 18.5%.
Meanwhile, Trent’s supermarket concept, Star, saw 25% operations revenue growth and double-digit growth in Q3. “Per square foot (on star) The revenue was 4% year-by-year-year to 31,600 (vs +4% year-by year for Avenue Supermarts), and the revenue per store increased in 12% year. -Rs 51.2 crore from year (vs +4% year-on-year for Avenue Supermarts.
Everyone said, “The strong growth rate of Trent, supported by aggressive store additions, showing the emerging categories including scales and beauty and personal care, offer a huge runway for development in the next few years, promising emerging categories. But there are some hiccups.
“We are optimistic on Trent’s growth story, while Strained Valuance offers a low margin of security security,” said Centrum Broking. ‘Add’ with a modified even-of-the-parts-based target price 6,245 (EV/Ebitda of 43.3X for FY27 estimates). In particular, Trent’s shares still have more than 40% in the last one year and currently trade about trade. 5,360 Apis.
Also read: Trent breathes over 50% increase in September quarter
