Tata group stock falls 8% despite net profit increases by 47% YoY in Sep Qtr
Tata group stock falls 8% despite net profit increases by 47% YoY in Sep Qtr
The Tata Group stock involved in apparel, footwear, accessories, and groceries fell 8 percent in Thursday’s trade despite reporting stable performance for the quarter ending September 2024.
Share Price Variation
In Thursday’s trading session, Trent Limited’s share price reached a high of Rs.7,015.25 per share below falling to Rs.6,306.85 per share, 8 percent down from its previous close of Rs.6,955.45 apiece. The stock has since retreated from this peak and is trading at Rs.6,487.65 per share.
Rationale for Rise
Such a bullish movement in the stock price was an outcome of an increase in revenue and net profits of the company in the recent quarter.
According to its recent filing, in the quarter ending September 2024, Trent Ltd reported a 39.4 percent increase in revenue to Rs.4,157 crore compared to Rs.2,982 crore in Q2 FY24. Furthermore, on a quarter-over-quarter basis, the company saw an increase of 1.2 percent from Rs.4,104 crore in Q1 FY25.
In the same period, the company reported a significant increase in net profit of 47 percent to Rs.335 crore in Q2 FY25, up from Rs.228 crore Q2 FY24, However the profits declined 15 percent from Rs.391 crore in Q1 FY25.
In terms of return ratios, return on capital employed (ROCE) is currently at 23.8 percent, while return on equity (ROE) is at 27.2 percent. The company has a strong current ratio of 1.79 and a low debt-to-equity ratio of 0.39.
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Brand Portfolio
Trent, a Tata Group company, owns brands like Westside for fashion and lifestyle, Zudio for affordable fashion, and Star Bazaar for groceries and household items. It also manages Utsa for ethnic wear and has a partnership with Zara for retail in India, offering a diverse range across apparel, accessories, and daily essentials.
Shareholding Pattern
According to the September 2024 shareholding pattern, the promoters of Trent Ltd hold 37.01 percent of the shares. Foreign Institutional Investors hold 26.62 percent, while Domestic Institutional Investors and Retail Investors hold stakes of 13.39 percent and 22.98 percent, respectively.
Company Overview
Trent Ltd, a subsidiary of the Tata Group, operates retail chains across India. The company runs department stores, hypermarkets, supermarkets, and specialty stores, offering a wide range of products such as clothing, footwear, cosmetics, perfumes, handbags, home furniture, and accessories.
Written by – Siddesh S Raskar
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