The shares of Trent Ltd., a Tata Group stock fell as much as 5.5% during the first half of the trading session on Friday touching their low of Rs 1,306.20 apiece. The decline in share price comes on the back of weak results announced by the retail giant for the quarter ending March 2023.
Owned by the salt-to-software conglomerate Tata Group, Trent is a large-cap retail company with a market value of Rs 46,000 crore. It owns and operates stores under its well-known brands including Westside, Zudio, Utsa, and Star. It sells clothes, ethnic wear, footwear, accessories, kitchen staples, groceries, and many other items through its stores.
On a consolidated basis, the company reported a net profit of Rs 45 crore on sales of Rs 2,183 crore for the quarter that ended March 2023 (Q4FY23). Profit after tax and income declined by 71% and 9% quarter on quarter (QoQ) from Rs 155 crore and Rs 2,303 crore it registered in December 2022 quarter (Q3FY23) respectively.
Trent clocked a loss of Rs 21 crore on sales of Rs 1,329 crore during the same quarter last year (Q4FY22). The investors expected better QoQ performance as its YoY results are not comparable because of the effect of Covid-19 led pandemic.
Overall, the business recorded the highest-ever sales for the full financial year 2022-23. The company communicated in a statement that its revenue growth is well in alignment with the expansion strategy currently being executed.
Noel N Tata, Chairman of Trent Ltd. communicated on the development, “Our lifestyle offerings across concepts, categories and channels are witnessing a strong momentum. We see growing relevance for our offerings, the resilience of our business model choices and the attractiveness of our differentiated platform.”
He further commented, “We are also increasingly applying our playbook to the star business and the strong customer traction we are witnessing gives us growing conviction of building-out this growth engine in the food and grocery space.”
Trent had 214 Westside stores, 352 Zudio outlets and 24 outlets in other formats. Furthermore, the company has been making investments in its online presence to make Westside an omnichannel brand. For instance, online sales accounted for 6% of the total Westside revenue in FY23.
The analysts at the brokerage firm Sharekhan by BNP Paribas have provided a ‘buy’ call on Trent stock with a target price of Rs 1,550. This translates into an upside of 19% from the day’s low of Rs 1,306 per share.
Written by Vikalp Mishra
