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ICICI Direct Report
Trent Ltd. continues to be the fastest growing apparel company with industry best revenue growth. Revenue compared to pre-Covid levels was at an impressive 220% versus industry average of 120-135%.
On a favorable base, sales grew 78% YoY to Rs 1813.6 crore. On a threeyear compound annual growth rate basis, revenue growth was at 30%, the highest among other lifestyle retailers.
Gross margins generally tend to be lower in Q2, mainly owing to end of season sale (average gross margins in Q2: 46-48%).
Q2 FY22 was an unusual quarter wherein the company had recorded 52% plus gross margins. Hence, on a significantly high base, gross margins declined 510 basis points YoY to 47.0%.
Furthermore, significantly higher opex (up 85% YoY) resulted in Ebitda margins declining 690 bps YoY to 15% (our estimate: 17%). On a three year CAGR basis, Ebitda growth was at an impressive 27%.
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