This Tata Group stock surges 8% post Q3; do you own it?

Shares of Trent, the retail arm of Tata Group, rallied nearly 8% in intraday trade on Thursday, in an otherwise muted broader market, after the company, which owns Westside and Zudio, released its third quarter earnings ended December 31, 2022. The retail stock witnessed strong volume with 1.05 lakh shares changing hands on the BSE, which was nearly three times the two-week average of 0.37 lakh scrips.

At 12:45 PM, Trent shares were trading 7.15% higher at ₹1,324.05 levels, holding early gains, while the market capitalisation stood at ₹47,068 crore. Early today, the counter opened higher for the second straight session, up 1.2% at ₹1,250.95 compared to the previous closing price of ₹1,235.70 on the BSE. During the session so far, the stock gained as much as 7.6% to ₹1,329.85. In comparison, the BSE Sensex was trading 45 points lower at 60,618 levels.

Trent share price currently trades 16% lower than its 52-week high of ₹1,571, touched on November 2, 2022, while it has risen 35% against its 52-week low of ₹983.70, hit on May 12, 2022. The largecap stock has surged 23.7% in the last one year, while it delivered flat return of 1% in the past six months. In the calendar year 2023, it has fallen 1.5%, while surged 8.5% in a month and 7% in a week.

Trent shares jumped on Thursday, a day after the Tata group company reported consolidated profit after tax (attributable to equity shareholders) at ₹167 crore for Q3 FY23, up 19.5% against ₹139.69 crore in the same period last year.  The consolidated sales rose 53.6% to ₹2,303.38 crore versus 1,499.08 crore in the corresponding period last year. The consolidated revenue jumped 54.6% to ₹2,365.24 crore compared with ₹1,529.95 crore in the year ago period.

The company in an exchange filing said that the third quarter results were not comparable with the corresponding quarter due to the change in profile and quantum of inventory provisioning, rent waivers between the three quarters on account of the pandemic. “Q3 FY22 had accounting for rent waivers and reversals relating to inventory provisioning. Accordingly, the CAGR of revenues and profitability versus FY20 is more representative of growth,” it said in the BSE filing.

The management said that the performance of the business and the growth momentum encourages it to continue with its expansion agenda over the medium term.

Segment wise, Westside registered a LFL (like-for-like) growth of 17% vis-à-vis Q3 FY22. The LFL is a measure of growth in sales, adjusted for new or divested businesses. Online revenues through Westside.com and other Tata group platforms contributed over 6% of Westside revenues.

Noel N Tata, Chairman, Trent said, “Our fashion concepts have continued to register encouraging growth momentum in Q3 FY23. We continue to expand our reach with vigour and reinforce our lifestyle offerings across concepts, categories, and channels. The growing acceptance of our brands demonstrates the attractiveness of our platform and the tremendous potential to address opportunities that lie ahead.”

As of date, the company operates 211 Westside stores, 326 Zudio stores, and 21 stores across other lifestyle concepts. Westside, a fashion & lifestyle store, has a footprint between 18,000-34,000 sq. ft. across over 127 cities, while Zudio, the value fashion format destination, operates with stores having a footprint of around 7,000-10,000 sq. ft.

During the quarter, the company entered into a 50:50 joint venture with the MAS Group of Sri Lanka for design, development and manufacture of lingerie, activewear and related apparel products.