Trent Ltd announces Q2 FY21 results

Trent Limited (the "Company"), today announced its financial results for the first half year ended September 30th, 2020 (standalone and consolidated).

Standalone Results

- During the quarter, various restrictions continued to apply at the local level including store closure requirements during weekends. This impacted performance with revenue from operations at Rs. 452crs, a decline of 45% vis-à-vis the corresponding previous period. Loss from operations1 was Rs. 59crs compared to a loss of Rs. 171cr in Q1.

- Nevertheless, it is encouraging to note that in recent weeks, all our stores are fully operational with local restrictions being increasingly withdrawn. The revenue trajectory continues to register strong recovery - on a comparable basis vis-à-vis last year, Oct 2020 was around 70% as against 38% in July 2020. Further improvement in consumer sentiment and traction in the recent weeks running upto Diwali is indeed encouraging.

- As shared earlier, we have pursued various cost mitigation measures and are seeking to retain realized efficiencies over the medium term. We have also been seeing encouraging support from our property partners. The results nevertheless incorporate conservative provisioning based on current visibility and hence, warrant to reviewed in the periods ahead. Separately, as required by the applicable standards, the rent & related charges (aggregating to Rs 23crs in Q2 and Rs. 58cr in H1) that do not warrant to be accrued have been accounted as part of other income notwithstanding they being operating in nature.

- The reported results also incorporate the IndAS 116 lease accounting requirements reflected across rent, depreciation, other income and finance costs in the statement of profit and loss. The net effect of Ind AS 116 on the standalone profit before tax for the quarter ended September 2020 was an adverse impact of Rs. 21crs in Q2 and Rs. 38crs in H1.

- The results for the quarter also recognize an amount of Rs 19crs on account of deferred taxes (including in respect of the losses incurred in Q2) given our view of the outlook for recovery in FY21 / FY22. The deferred taxes recognized for H1 was Rs. 61crs.

- We are also witnessing our customers increasingly leveraging the convenience of our digital platforms with the online channel registering over 50% growth over the previous year in the period post the Covid lockdowns.

- We continue to be focused and committed to the accelerated expansion agenda. To date, in FY21, we have opened 11 additional stores (8 Zudio, 2 Westside, 1 Landmark) and we continue to pursue opportunities in all relevant micro markets.

Consolidated Results

- For the quarter ended September 30th, 2020, the Company recorded revenues of Rs. 585crs. Loss after tax as attributable to the equity shareholders of the company was at Rs. 71crs.

- The consolidated results also incorporate the IndAS 116 lease accounting requirements. The net effect of Ind AS 116 on the reported profit before tax for the quarter ended September 2020 was an adverse impact of Rs. 22crs and for the half year it was an adverse impact of Rs. 44crs.

Speaking on the performance, Mr. Noel N Tata, Chairman, Trent Limited said, "We are witnessing encouraging recovery playing out across our concepts even as Covid related concerns continue. The improving consumer traction coupled with growing acceptance/ adoption of safety protocols by key stakeholders is welcome. We now expect the current festive season to be relatively positive.

As the recovery rate of Covid cases continues to improve, we are cautiously optimistic on the outlook for accelerating recovery and return to profitability in the second half. Near term uncertainties notwithstanding, we are continuing focus on building out differentiated brands and strong expansion of our reach through stores and digital platforms."

Shares of TRENT LTD. was last trading in BSE at Rs.678.05 as compared to the previous close of Rs. 668. The total number of shares traded during the day was 10075 in over 828 trades.

The stock hit an intraday high of Rs. 687 and intraday low of 663.3. The net turnover during the day was Rs. 6791683.

1 excluding non-operating income, finance costs, tax and IndAS 116 impact

Source : Equity Bulls

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