Brokerages are divided on Trent Ltd. after its September-quarter results, with HSBC raising its target price while Citi and Jefferies lowered theirs.
HSBC retained Buy and increased its target to Rs 3,480 from Rs 3,390, citing growth opportunities from Westside and Zudio expansion. Citi maintained Sell and cut its target to Rs 2,815 from Rs 2,950, while Jefferies retained Hold and reduced its target to Rs 3,300 from Rs 3,435. Bernstein remained positive with an Outperform rating and a target of Rs 3,500.
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Trent's September-quarter performance was broadly in line with estimates. Revenue rose 22.5% year on year to Rs 5,788 crore, while EBITDA increased 29.6% to Rs 1,054 crore. Net profit grew 8.6% to Rs 490 crore.
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Trent Q2 Highlights (YoY)
- Revenue rose 22.5% year on year to Rs 5,788 crore from Rs 4,724 crore.
- EBITDA increased 29.6% year on year to Rs 1,054 crore from Rs 813 crore.
- Net profit rose 8.6% year on year to Rs 490 crore from Rs 451 crore.
- EBITDA margin expanded to 18.2% from 17.2% a year earlier.
- Gross margin improved 120 basis points year on year to 44.5%, aided by premiumisation and product elevation.
- Retail area expanded 26%.
- Revenue productivity per square foot declined 3%.
- Like-to-like growth remained in the mid-single digits.
Here's what brokerages are saying after Trent announced Q2 results
HSBC
- Maintained 'Buy'; Target Price Raised To Rs 3,480 From Rs 3,390
- Expects H2FY27 growth momentum to continue, led by Westside and Zudio expansion.
- Expects the annual pace of store openings to remain broadly steady.
- Identified Tier II and peripheral markets as key expansion priorities.
- Raised FY27 EBITDA estimates by 7% and FY28–FY29 estimates by 2–3%.
Citi
- Maintained 'Sell'; Target Price Cut To Rs 2,815 From Rs 2,950
- Expects the annual pace of store openings to remain broadly consistent, with expansion into smaller cities.
- Raised FY27–FY29 revenue estimates by around 2%.
- Cut FY27 and FY28 earnings per share estimates by 6% and 3%, respectively.
- Flagged valuation concerns and input-cost inflation risks.
Jefferies
- Maintained 'Hold'; Target Price Cut To Rs 3,300 From Rs 3,435
- Retained annual store-opening guidance of 200–250 Zudio stores and 50 Westside stores.
- Highlighted emerging categories, online channels and smaller-city expansion as growth drivers.
- Flagged input-cost inflation and competitive pressures.
Bernstein
- Maintained 'Outperform'; Target Price At Rs 3,500
- Said Q2 standalone revenue grew 22% year on year.
- Highlighted 26% expansion in retail area.
- Noted that gross margin improved 120 basis points year on year to 44.5%, aided by premiumisation and product elevation.
- Flagged slower Zudio and Westside store additions and a 3% decline in revenue productivity per square foot.
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