Trent Q2 Review - Strong Beat; Rich Valuation Leaves Limited Room To Err: Dolat Capital
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Dolat Capital Report
Trent Ltd.’s Q2 FY22 performance was significantly ahead of ours and street’s estimates. These we believe is led by new stores, faster stabilisation, strong pent-up demand and costs mitigation measures.
Operational days stood at 91% versus 46% YoY.
Trent is India’s leading apparel retailer with proven store formats like Westside, Zudio (in standalone), and Zara (under joint venture) is a structural play on India’s huge apparel opportunity.
Trent has geared up for aggressive store expansion and has shed its conservative approach. Management has patiently tried and tested sustainability of the business model before replicating it on a pan-India basis at a speedy pace.
Reducing losses in Star Bazaar and improving traction in Inditex JV augurs well over the medium term.
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