The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.
ICICI Direct's research report on Trent
Trent is India’s leading retailer with a presence across various consumer categories (550+ stores). Inherent strength of brands (Westside, Zudio, Star, Zara) and accelerated store additions have led Trent to be among the fastest growing companies in our retail coverage universe. ‘Westside’ (72% of revenues) has proven to be one of the most profitable business models as it primarily focuses on selling private label brands (EBITDA margin: 11%, consistent SSSG: 10+%) • ‘Zudio’ (28% of sales), the value fashion brand, continues to provide the next leg of growth for Trent (revenue CAGR: 72% FY19-22).
Outlook
Robust performance during challenging times and industry leading performance will continue to warrant premium valuations for Trent. Hence, we maintain our BUY rating on the stock. We value Trent at Rs 1470 based on SOTP valuation.
More Info
At 14:18 hrs Trent was quoting at Rs 1,074.50, down Rs 12.10, or 1.11 percent.
It has touched an intraday high of Rs 1,092.75 and an intraday low of Rs 1,073.20.
It was trading with volumes of 36,394 shares, compared to its thirty day average of 36,252 shares, an increase of 0.39 percent.
In the previous trading session, the share closed down 2.43 percent or Rs 27.05 at Rs 1,086.60.
The share touched its 52-week high Rs 1,347.10 and 52-week low Rs 830.05 on 07 April, 2022 and 17 June, 2021, respectively.
Currently, it is trading 20.24 percent below its 52-week high and 29.45 percent above its 52-week low.
Market capitalisation stands at Rs 38,197.13 crore.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More