Trent Ltd June quarter results (Q1FY22) show that the recovery being witnessed following the easing of the first lockdown last year has paused. After all, standalone revenues declined as much as 58 per cent vis-à-vis the March quarter. Of course, YoY growth numbers were exceptionally high given the low base. The company’s fashion business (Westside and Zudio) operated for just 46 per cent of the trading days, although this was up from 26 per cent in Q1FY21. This measure stood at 80 per cent for the March quarter.

The upshot: the company swung to operating losses in Q1FY22 against a profit in the March quarter. Earnings before interest, tax, depreciation and amortization (Ebitda) loss for Q1FY22 stood at nearly Rs 32 crore, from a profit of Rs 137 crore during Q4FY21.

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“Trent mirrored the sector weakness in the wake of covid restrictions and reported loss at Ebitda along with below normal revenue trend (year-on-year strong),” said analysts from Jefferies India Pvt. Ltd in a report on 10 August. Even so, Trent adopted various cost mitigation measures, which helped curtail losses YoY.

After the results, shares of Trent fell around 8 per cent to Rs875 apiece on Wednesday on the National Stock Exchange. To be sure, analysts point out that the company’s results are broadly in line. Note that the company’s existing chief executive officer (CEO), Stephen Rayfield, has resigned. Chief financial officer P. Venkatesalu has been appointed CEO, effective October 2021, for three years.

Stock Covered in the news

Trent Ltd-View Detailed Analysis