The Trent Q2 results were declared on Thursday, where revenue and profit have witnessed a noticeable hike. However, it failed to meet the market’s hopes and dropped its share price by 8%. Tata Group’s Trent Ltd., recently included in Nifty 50, has clocked a 39% hike in revenue.
It has hiked the revenue to ₹4,157 crore for the September quarter as against ₹2,982 crore in the same quarter the previous year. However, the figure was short of the amount pegged at ₹4,295 crore that emerged in a CNBC-TV18 poll.
Trent’s net profit rises by 47%, yet below estimation
The net profit at Trent rose 47% year on year to ₹335 crore. This, too, was short of estimates that had pegged a profit at ₹428 crore. The bottom line on other income hurt because it slumped to ₹48 crore from ₹80 crore in the year ago period. Added expenses, such as depreciation that rose to ₹197 crore and increased taxes to ₹132 crore, took the sheen off the profitability.
Q2 results Trent’s EBITDA clocked at ₹643 cr, very close to estimate. EBITDA margins remained flat at 15.5%, slightly higher than the expected 15.7% and higher than the last year’s margin at 15.3%.
Though the economy was challenging, Trent’s fashion and personal care categories showed double-digit growth with beauty, innerwear, and footwear contributing more than 20% of the business.
In the quarter, Trent opened 43 new stores in both Westside and Zudio brands and consolidated some sites. Its Star Hypermarket business posted a 27% revenue gain with Like-for-like growth of 14%, reflecting a broad improvement in operating performance.
However, those gains came at a cost. Higher market expectation resulting from the lofty stock valuations was the price. The shares crashed to ₹6,398 post-results, down 25% from the peak of ₹8,345 in two months. However, shares are up 120% for the year.
Retail market expert’s statement on Trent Q2 results
Prakash Diwan, retail market expert, says,
“Trent has performed well in a tough retail environment, but it continues to get pressure because of the high valuations.”
Also, see: Indian employees in USA: What does Trump’s victory mean for H-1B visas for Indians?