Tata Group's blue-chip company Trent is scheduled to report its results for the quarter and nine-months ended on December 31, 2024 later today. The brokerage firms tracking the specialty retail chain are expecting a strong set of performance from the company in the latest quarter on both quarter-on-quarter (QoQ) and year-on-year (YoY) basis.
Analysts are expecting a solid growth in revenue, particularly on a yearly comparison, while net profit is likely to rise sharply higher for the quarter. Ebitda margins may contract on a YoY basis, but a growth of more than 250 basis points (bps) is seen on a sequential basis, particularly after the addition of the new stores. The store count and revenue per square-feet (sq ft) shall be the key things to watch out for.
Nuvama Institutional Equities expects Trent to report a revenue of Rs 4,637.3 crore, up 40 per cent YoY and 15 per cent QoQ. Ebitda is seen at Rs 8,56.5 crore, up 37 per cent YoY and 34 per cent QoQ. Core net profit is seen at Rs 574.4 crore, up 36 per cent sequentially.
"We built an addition of 57 fashion stores in Q3FY25 on a net basis. Overall, we expect Trent to report industry-leading growth again. We are assuming 12 per cent LFL growth for the fashion portfolio. We expect gross margins to moderate about 50 bps YoY but improve 130 bps sequentially. We expect Trent to report an Ebitda margin of 18.5 per cent in Q3FY25," Nuvama added.
Ahead of its Q3 results, shares of Trent Ltd dropped nearly 3 per cent to Rs 5,583 on Thursday, with its total market capitalization slipping below Rs 2 lakh crore mark. The stock had settled at Rs 5751.35 in the previous trading session on Wednesday. The stock is down over 33 per cent from its 52-week high at Rs 8,345.85, hit in October 2024.
Equirus Securities expects Trent to report a 29 per cent YoY and 5.9 per cent QoQ rise in the net sale at Rs 4,274 crore, with net profit coming in at Rs 462.5 crore, up 28.7 per cent YoY and 9.2 per cent QoQ. Ebitda is pegged at Rs 786.6 crore. up 26.2 per cent YoY and 22.8 per cent QoQ, with Ebitda margins surging 252 bps sequentially to 18.4 per cent for the quarter.
"Trent should continue its outperformance vs the industry but the growth rates moderate from 40 per cent in past few quarters to 30 per cent given the high base effect and slowdown in new store additions. Margins should remain robust led by healthy double digit SSSG," Equirus added with a 'reduce' rating. It said that new store openings shall be the key element to track.
Kotak Institutional Equities is expecting Trent to clock net sales at Rs 4,719.9 crore, up 42.5 per cent YoY and 17 per cent QoQ. Ebitda is seen at Rs 875.6 crore, up 40.5 per cent YoY and 36.7 per cent QoQ, with Ebitda margins expanding 267 bps sequentially to 18.6 per cent for the quarter. Net Profit is seen at Rs 549.5 crore, up 59.9 per cent YoY and 29.8 per cent QoQ.
"We model revenue growth driven by new store additions in Zudio and Westside and 5 per cent YoY growth in revenue per sq. ft. We expect YoY area growth of 40 per cent, driven by addition of larger-sized stores. We model consolidated revenue growth of 17.6 per cent YoY in 3QFY25, driven by the addition of 10 stores and single-digit SSSG. We expect gross margins to increase 180 bps qoq but to stay flat YoY," said Kotak, with an 'add' rating on the stock.