Indian retailer Trent drops most in 7-months on weak Q4 margins

Shoppers Stop

28/04/2023 08:22

** Retailer Trent's shares  TREN.NS  fall as much as 5.5% in
their sharpest intraday pct loss since Sept. 26
    ** Tata Group-owned co posts 64% jump in Q4 sales on store
additions, like-for-like sales growth
    ** But Jefferies ("hold") notes gross margins fell ~800bps
YoY and ~450bps QoQ to 40.8%, well below estimates and a
multi-qtr low
    * Ambit Capital ("sell") says GM hit by rev pie continuing
to tilt towards budget-friendly chain Zudio and Trent absorbing
high cotton prices
    ** Kotak ("buy") says weaker-than-expected GMs led to a 5%
miss in EBITDA, while 14 flagship Westside store additions in
FY2023 missed its est of 25 stores
    ** Ambit Capital expects Zudio store expansion to outpace
Westside, because of which it lowers its FY24 EBITDA margins est
    ** TREN now flat YTD, while Shoppers Stop  SHOP.NS  is up 7%
and the Nifty FMCG index  NIFTYFMCG  is down 6.5%

 (Reporting by Dimpal Gulwani and Ashish Chandra in Bengaluru)
 ((dimpal.gulwani@thomsonreuters.com))