Retail major Trent Ltd is set to announce its quarterly earnings for the quarter and half year ended on September 30, 2024 (Q2FY25 and H1FY25) on Thursday, November 8. A host of brokerage firms continue to remain positive on the Tata Group's multibagger and expect it to report a strong set of performance in the given period.
Brokerage firms are expecting a more than 50 per cent rise in the revenue of Trent on a year-on-year (YoY) basis, while its net profit may rally up 70 per cent on a yearly comparison on the back of new store addition. On a quarter-on-quarter (QoQ) basis, strong operational performance is expected with a healthy growth in margins.
Equirus Securities expects Trent's to report a revenue of Rs 4,542.9 crore, up 57.2 per cent YoY and 13.8 per cent QoQ. Ebitda is seen at Rs 751.9 crore, up 63.1 per cent YoY and 23.1 per cent QoQ with margins improving 125 bps sequentially to 16.6 per cent. PAT is pegged at Rs 497.4 crore, up 71.7 per cent YoY and 45.4 per cent QoQ.
Equirus expects Trent to deliver industry leading performance with SSSG in early teens. Led by strong revenue growth, operating margins to expansion, despite the contribution of sale. "Demand growth trends and new store openings shall be the key things to watch for," added the brokerage.
Axis Securities sees Trent's revenue at Rs 4,481 crore, up 55 per cent YoY and 12.2 per cent QoQ. Ebitda is seen at Rs 745 crore, up 61.6 per cent YoY and 21.9 per cent QoQ, with Ebitda margins expanding 132 bps sequentially at 16.6 per cent. PAT is seen at 503 crore, up 73.5 per cent YoY and 46.9 per cent QoQ.
Axis said that healthy revenue growth expected to continue on back of store expansion and Ebitda margins is expected to increase on account of strong operating leverage. It said that demand outlook in Metros, Tier 2 and 3 towns ahead of festive season and store expansion guidance shall be the key monitorables.
Shares of Trent Ltd dropped more than 2.86 per cent to Rs 6,753.95 on Thursday, commanding a total market capitalization Rs 2.45 lakh crore. The scrip had settled at Rs 6,953.05 in the previous trading session. The stock has corrected nearly 19 per cent from its 52-week high at Rs 8,345.85, hit on October 14.
Nuvama Institutional Equities pegs Trent's revenue at Rs 3,7033 crore, up 46 per cent YoY and 16 per cent QoQ, while Ebitda is seen at Rs 582 crore, rising 59 per cent YoY and 22 per cent YoY, with Ebitda margins coming in at 22.7 per cent. Core PAT is likely to come in at Rs 294 crore, up 55 per cent sequentially.
"We built an addition of 15 fashion stores in Q2FY25 on a net basis. Overall, we expect Trent to report industry-leading growth again and build a revenue growth of 51 per cent YoY. We are assuming 12 per cent LFL growth for the fashion portfolio. We expect gross margins to improve about 150bp YoY but stay stable sequentially," Nuvama added.
Kotak Institutional Equities pegs its revenue at Rs 4,511.6 crore, up 56.1 per cent YoY and 13 per cent QoQ. Ebitda is seen at Rs 787.7 crore, up 71 per cent YoY and 29 per cent QoQ, Ebitda margins rising 152 per cent sequentially to 17.5 per cent. Net profit may come in at Rs 460.3 crore, up 58.9 per cent YoY and 34.5 per cent QoQ.
"We expect YoY area growth of 37 per cent driven by addition of larger sized stores. We expect gross margins to decline 100 bps QoQ but to expand by 50 bps YoY. Strong revenue growth, coupled with fixed cost operating leverage, will drive YoY Ebitda growth of 71 per cent," said Kotak.