Trent Q3 Results Preview: Profit may rise up to 17% YoY; revenue may jump 20%

Brokerages expect Trent to post another quarter of strong topline growth and healthy earnings momentum in the December-ended quarter. Management commentary on demand sustainability, store productivity and margin trajectory will be key for the stock after the results.

The company's profit after taxes (PAT) is expected to grow 9%–17% year-on-year, ranging from Rs 470 crore to Rs 540 cror,e while the revenue may rise 17%-20% between Rs 5,220 crore and Rs 5,570 crore.

The Tata Group company will announce its Q3 earnings on Wednesday, February 4. The estimates by ElaraCapital and HDFC Securities have been taken into account, and here's what they recommended:


1) PAT

Elara Capital expects PAT at Rs540 crore, up 9% YoY and a sharp 45% QoQ, driven by operating leverage and festive-led sales momentum.

HDFC Securities pegs adjusted PAT lower at Rs 470 crore, but sees stronger YoY growth of 17% and a 3.5% QoQ uptick, reflecting steady profitability despite margin headwinds.

2) Revenue

Elara Capital estimates revenue at Rs 5,570 crore, implying 20% YoY and 16% QoQ growth, supported by store additions and sustained traction in core formats.

HDFC Securities forecasts revenue of Rs 5,220 crore, up 17% YoY and 11% QoQ, with growth led by Westside and Zudio.

Performance split between formats, with Westside and Zudio estimated to grow 13% and 19% YoY, respectively.

3) EBITDA

Elara Capital sees the Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) at Rs 1,020 crore, rising 21% YoY and 24% QoQ on the back of scale benefits and operating efficiencies.

HDFC Securities estimates EBITDA at Rs 940 crore, up 23% YoY and 16% QoQ, aided by cost controls and improved throughput.

4) EBITDA margin

HDFC Securities expects EBITDA margin at 18.1%, expanding 84 bps YoY and QoQ due to operational efficiencies, even as the rising share of Zudio puts some pressure on gross margins.

Elara Capital has not provided a specific margin estimate but flags that slower traction in newly added stores could cap near-term margin upside.

5) Key monitorables

Elara Capital said that the sustainability of low single-digit like-for-like (LFL) growth in the fashion business will be a key factor to monitor. Moreover, a slower ramp-up in newly added stores, which could weigh on overall growth will also be watched out for.

HDFC Securities said that the investors should watch out for the management commentary on demand trends and store expansion strategy.

Impact of product mix, as a higher salience of Zudio is expected to lead to a ~60 bps YoY contraction in gross margins to 43.3%, despite EBITDA margin expansion.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)