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Apparel retail firm Trent's expansion seamlessly tailors its growth success

Apparel retail firm Trent's expansion seamlessly tailors its growth success

by | Aug 11, 2024 | Share Market


4 min read Last Updated : Aug 11 2024 | 10:50 PM IST


The stock of Trent, the largest listed apparel retail company, surged on Friday after the company exceeded Street expectations for the April-June quarter (Q1) of 2024-25 (FY25). The Tata-owned company boosted shareholder wealth by 11.2 per cent in a single day, bringing the week’s gains to 16 per cent. Over the past year, the stock has been a top wealth creator in the S&P BSE 100, rising 3.3 times, or 231 per cent.


Standalone revenues for the quarter increased by 56 per cent year-on-year (Y-o-Y) to Rs 3,992 crore (consolidated at Rs 4,104 crore), coming off a high base. The previous year’s quarter had registered a growth of 46 per cent. The company has more than doubled its revenue over the past eight quarters, with a twelvefold increase since Q1 of 2021-22.


Growth for the company in the June quarter was driven by both like-for-like (LFL) improvement and expansion of the store network. The company reported double-digit LFL growth for its fashion concepts (Westside and Zudio).


Westside added six stores during the quarter, while Zudio expanded by 16 stores across 12 cities. Compared to the previous year, Westside’s store additions were in the mid-single digits, whereas Zudio’s grew by 44 per cent.

The company noted that both Westside and Zudio continued to gain traction despite challenges, including heatwave conditions in some regions and the general elections.

 


Noel Naval Tata, chairman of Trent, commented, “The overall market sentiment remains subdued with increased competitive intensity. On our part, we continue to witness encouraging traction for our lifestyle offerings across brands, concepts, categories, and channels.”


Trent’s performance stands out as peers struggle with sales growth.


Aditya Birla Fashion and Retail (ABFRL) reported a 7.3 per cent increase in consolidated revenues, while standalone revenue growth was flat at 0.6 per cent. Its lifestyle brands contracted 5 per cent Y-o-Y with negative single-digit LFL growth.


Analysts at Nuvama Research, led by Rajiv Bharati, observed, “ABFRL posted muted top-line growth amid a broader slowdown in discretionary consumption. While Pantaloons performed relatively well, benefiting from stronger demand in the value segment, the ethnic and lifestyle businesses were hurt by the delayed wedding season.”


Despite being a seasonally strong quarter, Page Industries also reported weak 4 per cent revenue growth on a 3 per cent volume improvement. There may be a delayed recovery for the company, given that the 4 per cent growth was based on a soft base during a typically robust sales period.


The strong revenue performance is mirrored in the company’s operating results. Consolidated gross margins were 45.1 per cent, 188 basis points (bps) higher due to operating leverage and moderated input costs. Operating profit (earnings before interest and tax) grew by 113 per cent to Rs 417 crore, while consolidated operating profit increased by 105 per cent to Rs 445 crore. This growth occurred despite a 64 per cent rise in employee and rental costs and a 57 per cent increase in other expenses. The company reported an operating profit margin of 10.6 per cent, 280 bps higher than the previous year, despite a growing share of lower-margin Zudio stores.


In addition to the fashion business, investors will monitor the progress of the Star hypermarket format stores. The 72-store business recorded revenue growth of 29 per cent and LFL growth of 20 per cent. The company reported improved operating performance across its brands, staples, fresh products, and general merchandise offerings, which now contribute over 70 per cent of revenues. With strong customer traction, the Star business is expected to become an additional growth engine and boost overall profitability.


Centrum Research has raised its FY25 and 2025-26 earnings forecasts by 11-13.5 per cent due to continued store expansion and earnings outperformance.


Analysts Shirish Pardeshi and Nikhil Kamble of Centrum Research said, “In a challenging environment across categories, with aggressive store expansion, Trent witnessed robust consumer traction and healthy LFL growth. This indicates a successful marketing strategy driving value-for-money customers, sharp price points leading to customer traffic, and the right store matrix.”


The brokerage has an ‘add’ rating, noting that valuations at 131 times its FY25 earnings are in stretched territory.

First Published: Aug 11 2024 | 10:50 PM IST



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CB Bhave to UK Sinha: A look at controversies surrounding past Sebi chiefs

CB Bhave to UK Sinha: A look at controversies surrounding past Sebi chiefs

by | Aug 11, 2024 | Share Market


From left – Sebi Chiefs Ajay Tyagi (2017-2022); C B Bhave (2008-2011); U K Sinha (2011-2017) (Photo: Wikimedia Commons)

2 min read Last Updated : Aug 11 2024 | 10:23 PM IST


Securities and Exchange Board of India (Sebi) chief Madhabi Puri Buch is not the first chairperson to get embroiled in controversy. This comes months before her three-year term is due for an extension in March. Typically, this is the time when files start to move in the North Block over fresh appointment or reappointment of the Sebi chief. The previous three chairpersons, dating back to C B Bhave in 2008, have courted some controversies, indicating the complications that come with heading India’s $5.3-trillion stock market watchdog. Here is a look at the controversies surrounding past Sebi chiefs


C B Bhave


Tenure: Feb 19, 2008-Feb 17, 2011

 


Before assuming charge as Sebi chief, Bhave was the chairperson of National Securities Depository Limited (NDSL), which was accused of poor oversight leading to fake initial public offering applications between 2003 and 2005. When Bhave moved from NSDL to market regulator Sebi, there were questions raised over a conflict of interest although he recused himself from theNSDL case. The controversy caught on during the time of his reappointment which thwarted any chance of an extension.


U K Sinha


Tenure: Feb 18, 2011-Mar 01, 2017

 


UK Sinha, the 1976-batch Indian Administrative Service (IAS) officer, is one of the longest serving Sebi chief. However, he started on a rocky note.  Within weeks of his appointment, Sebi’s whole-time member KM Abraham shot a letter to the Prime Minister alleging that the then Finance Minister Pranab Mukherjee, and his adviser Omita Paul had pressured Sinha to go soft against some high-profile corporates. There were various public interest litigations (PILs) filed challenging his appointment as Sebi boss, but most of them were dismissed by the courts.


Ajay Tyagi


Tenure: Mar 01, 2017-Feb 28, 2022

 


The 1984-batch IAS officer from Himachal cadre largely had a blemish-free stint. However, just ahead of the end of his five-year term, Sebi came under intense scrutiny over its handling of the case pertaining to lapses at the National Stock Exchange (NSE), which dated back to 2010 and 2015. This was triggered by an order issued by Sebi which revealed that then NSE chief Chitra Ramkrishna was taking orders from a mystic Yogi said to be residing in the Himalayas to run the country’s largest stock exchange.

First Published: Aug 11 2024 | 9:04 PM IST



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Hindenburg row: Sebi, chief Buch rebut fresh allegations in Adani matter

Hindenburg row: Sebi, chief Buch rebut fresh allegations in Adani matter

by | Aug 11, 2024 | Share Market


SEBI Chairperson Madhabi Puri Buch (Photo: PTI)

4 min read Last Updated : Aug 11 2024 | 9:54 PM IST


The Securities and Exchange Board of India (Sebi) and its chairperson, Madhabi Puri Buch, on Sunday rebutted fresh allegations made by New York-headquartered Hindenburg Research in the Adani matter.


In a new report on Saturday, Hindenburg questioned the delay in the Adani probe and Sebi’s objectivity in the matter, alleging Buch and her husband, Dhaval, were conflicted parties because they had invested in a fund that was allegedly used to inflate stock prices of the Adani group.


Besides raising eyebrows over the use of a foreign fund structure, the US short-seller also accused the Indian securities regulator of promoting real estate investment trusts (REIT) due to Dhaval Buch’s association with private equity major Blackstone, a large investor in the domestic realty space.


Both Sebi and the Buchs issued separate statements rebutting all the allegations, terming them baseless and an attempt at character assassination.


The Buchs found support from legal experts and market participants such as Amfi, the mutual fund industry body, which backed her credibility and questioned the US short-seller’s intent. However, the Sebi chairperson faced criticism from certain political parties, which called for a joint parliamentary committee to probe the allegations.


Citing whistleblower documents, Hindenburg had on Saturday issued a report on the couple’s investments in IPE Plus 1 Fund, a Mauritius-based segregated fund under the Global Dynamic Opportunities Fund (GDOF) managed by IIFL Wealth (now 360-One)


The Buchs and 360-One clarified the fund, accused of having links to the Adani group, had never invested in any Adani securities throughout its tenure. Further, the holdings of the Buchs were only 1.5 per cent of the fund’s corpus and they never had any say in the investment decisions.


The couple stated their investment, which dates back to a time when they were residing in Singapore, was because Chief Investment Officer Anil Ahuja was Dhaval’s childhood friend. They soon redeemed after Ahuja quit in 2018.


Responding to the allegations that Sebi was favouring REITs, the couple stated that Dhaval had no association with the real-estate side of Blackstone and was associated with private equity PE and other companies, given his expertise in supply-chain management.


Buch said Blackstone was on her “recusal list” and all disclosures and recusal had been diligently followed at Sebi.


The market watchdog in its statement said the regulatory decisions around REITs were not favourable to only one player and the decisions were taken after public consultation with board approval.


On the allegations that Sebi had not taken any action against the Adani group due to conflict of interest, the regulator stated that 23 out of 24 investigations in the Adani-Hindenburg matter were completed and one is close to completion. Sebi said enforcement proceedings were cumbersome, involving issuing show-cause notices, providing personal hearing, which then culminates in an order.


On June 26, Sebi had slapped show-cause notices (SCNs) on Hindenburg Research, its founder Nathan Anderson, hedge fund Kingdon Capital, and three others. In the notice, the regulator had alleged Hindenburg had made misleading disclosures as a scheme to make a profit of Rs 183 crore from short-selling to client Kingdon Capital, with which it had shared its report before making it public. Hindenburg and Kingdon had entered into a 25 per cent profit-sharing pact.


The domestic securities regulator had given 21 days to submit responses. “Hindenburg has been served a show cause notice for a variety of violations in India. It is unfortunate that instead of replying to the notice, they have chosen to attack the credibility of the Sebi and attempt character assassination of the chairperson,” the regulator said.


Sebi’s probe into the Adani-Hindenburg matter was initiated after the latter published a report on the group, alleging “fraud”, in January 2023.


The report had wiped out Rs 12 trillion of the Adani group firms’ market cap from Rs 19.2 trillion to below Rs 7 trillion. The group has now recouped all the losses and trades above the levels seen before the publication of the initial Hindenburg report in January 2023.


In a fresh statement, the Adani group called Hindenburg’s latest allegations mischievous and manipulative.


“We completely reject these allegations against the Adani Group which are a recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Supreme Court in January 2024,” the group said in an exchange filing.

First Published: Aug 11 2024 | 9:04 PM IST



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Hindenburg row: Sebi breaks silence, only 1 probe remaining on Adani Group

Hindenburg row: Sebi breaks silence, only 1 probe remaining on Adani Group

by | Aug 11, 2024 | Share Market


2 min read Last Updated : Aug 11 2024 | 7:27 PM IST

The Securities and Exchange Board of India (Sebi) on Sunday urged investors to exercise due diligence before reacting to reports such as Hindenburg Research. The market regulator added that only one investigation remains in the Adani Group matter, which is close to completion.


“The Supreme Court, in its order of January 3, 2024, noted that Sebi had completed twenty-two out of twenty-four investigations into the Adani Group. Subsequently, one more investigation was completed in March 2024, and one remaining investigation is close to completion,” said Sebi.


Coming to the defence of its chairperson, Madhabi Puri Buch, the market watchdog said that it has adequate internal controls.

“Sebi has adequate internal mechanisms for addressing issues relating to conflict of interest, which include a disclosure framework and provisions for recusal. It is noted that relevant disclosures required in terms of holdings of securities and their transfers have been made by the chairperson from time to time. The chairperson has also recused herself in matters involving potential conflicts of interest,” Sebi said in a statement issued on Sunday.

Also Read: Sebi’s Buch in Hindenburg’s firing line: How will markets react on Monday?


Regarding its show-cause notice issued to Hindenburg Research, Sebi pointed out that the matter is ongoing and is being dealt with “in accordance with established procedure and in compliance with the principles of natural justice.”


Sebi also called the allegations of favouritism towards Blackstone through regulations on REITs ‘inappropriate’.


“For the development of the Indian securities market, Sebi has at various times underscored the potential of REITs, SM REITs, InvITs, and Municipal Bonds among other asset classes for the democratisation of markets, financialisation of household savings, and for capital formation through the capital markets,” the statement noted.


“The claim that promoting REITs and SM REITs among various other asset classes by Sebi was only for benefiting one large multinational financial conglomerate is inappropriate,” it added.

First Published: Aug 11 2024 | 7:27 PM IST



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Buch issues fresh details, says Blackstone on her 'recusal list' with Sebi

Buch issues fresh details, says Blackstone on her 'recusal list' with Sebi

by | Aug 11, 2024 | Share Market


Chairperson of the Securities and Exchange Board of India (SEBI) Madhabi Puri Buchin Mumbai, Tuesday, April 2, 2024. (Photo: PTI)

2 min read Last Updated : Aug 11 2024 | 5:10 PM IST


Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (Sebi), on Sunday clarified that Blackstone was on the ‘recusal list’ maintained by the market regulator, which implies she was not involved in decisions impacting Blackstone.

In a fresh statement, Puri Buch and her husband Dhaval Buch provided additional details on their wealth, consultancy firms, associations, and investments in the alleged funds cited by Hindenburg Research.


They stated that the couple had “accrued their savings through their salaries, bonuses, and stock options” collected over their corporate careers spanning decades. While the Sebi chair has worked with financial services firms for over two decades, her husband was associated with Hindustan Unilever and parent Unilever for over 35 years.


“Insinuations that a handful of these matters related to the REIT industry were favours to any specific party are malicious and motivated,” said the couple in response to allegations of favouring Blackstone, a firm where Dhaval acts as an advisor.


They added that the regulatory decisions made by Sebi on REITs were approved by the board and not by the chairperson alone and followed the consultation process.


In their statement, they also clarified that Dhaval has never been associated with the real estate side of Blackstone and that his appointment at Blackstone Private Equity pre-dates Madhabi’s appointment as Sebi chairperson.


They added that their investments in the alleged funds were made as private citizens and almost two years before her appointment at Sebi.


“At no point in time did the fund invest in any bond, equity, or derivative of any Adani Group company,” they stated.


The decision to invest in the fund was made on the suggestion of their friend Anil Ahuja, who was the chief investment officer and an ex-employee of Citibank and JP Morgan.


The couple redeemed their investments in the fund when Ahuja left his position as the CIO of the fund, according to the statement.


Puri Buch also clarified that the two consulting companies set up by her during her stay in Singapore have been dormant since her appointment at Sebi and were part of her disclosures to the market regulator. Further, they were also disclosed to the tax authorities and Singapore authorities at the time of the change in shareholding to Dhaval.

First Published: Aug 11 2024 | 5:10 PM IST



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INDIA bloc demands JPC probe into Hindenburg allegations against Sebi chief

INDIA bloc demands JPC probe into Hindenburg allegations against Sebi chief

by | Aug 11, 2024 | Share Market


Jairam Ramesh said Sebi’s strange reluctance to investigate the Adani mega scam has been long noted. (File Photo)

4 min read Last Updated : Aug 11 2024 | 3:28 PM IST


Constituents of the opposition INDIA bloc on Sunday demanded a joint parliamentary committee (JPC) probe into the allegations of the US-based short-seller Hindenburg Research against Sebi Chairperson Madhabi Puri Buch and her husband Dhaval Buch.


In its latest report on Saturday, Hindenburg Research claimed that Madhabi and Dhaval had investments in the same offshore entity that was allegedly used to inflate Adani Group’s stock prices. 


Congress general secretary (communications) Jairam Ramesh, in a statement on his party’s behalf, said that Sebi’s “strange reluctance to investigate the Adani mega scam has been long noted”, including by the Supreme Court’s Expert Committee. The committee, he said, had noted that Sebi in 2018 diluted, and in 2019 entirely deleted the reporting requirements relating to the ultimate beneficial (i.e. actual) ownership of foreign funds.


“This had tied its hands to the extent that ‘the securities market regulator suspects wrongdoing, but also finds compliance with various stipulations in attendant regulations… It is this dichotomy that has led to Sebi drawing a blank worldwide’,” Ramesh said quoting the Expert Committee.


Under public pressure, after the Adani horse had bolted, Sebi’s board reintroduced stricter reporting rules on June 28, 2023. It told the Expert Committee on August 25, 2023, that it was investigating 13 suspicious transactions. Yet the investigations never bore fruit, the senior Congress leader added.


He said the Hindenburg Research’s revelations show that Madhabi and her husband invested in the same Bermuda and Mauritius-based offshore funds in which “Vinod Adani and his close associates Chang Chung-Ling and Nasser Ali Shahban Ahli invested funds earned from the over-invoicing of power equipment”.


“These funds are believed also to have been used to amass large stakes in Adani Group companies in violation of Sebi regulations. It is shocking that Buch would have a financial stake in these same funds,” Ramesh said.


“This raises fresh questions about Gautam Adani’s two 2022 meetings in quick succession with Buch shortly after she became Sebi chairperson. Recall that Sebi was supposedly investigating Adani transactions at the time,” Ramesh said, demanding that the government act immediately to eliminate all conflicts of interest in the Sebi’s investigation of Adani Group. “The fact is that the seeming complicity of the highest officials of the land can only be resolved by setting up a JPC to investigate the full scope of the Adani mega scam,” he said.


The opposition parties also accused the government of concluding the Budget session of Parliament a day in advance for fearing the backlash on the issue. The Budget session was scheduled to end on Monday but concluded on Friday.


“When Parliament does not run, who is the biggest beneficiary?” asked Trinamool Congress Rajya Sabha leader Derek O’Brien. The beneficiary is the government which is why Prime Minister Narendra Modi’s “shaky coalition” cut short the Parliament session yet again, he said, adding that the INDIA alliance parties would have held the government accountable on Monday.


Trinamool’s Lok Sabha member Mahua Moitra said Hindenburg Research’s report was proof of “crony capitalism at its finest”. In a post on X, she asked whether the Central Bureau of Investigation (CBI) and the Enforcement Directorate will lodge cases under the Prevention of Corruption Act and Prevention of Money Laundering Act.


“One simple point – chairperson who has invested in (and interacted personally with) very same funds that need investigating, is leading (the) organisation entrusted with (the) fiduciary responsibility of finding out other owners of the fund tells (the) Supreme Court and its six-member committee that it had ‘drawn a blank’ and was a ‘chicken and egg situation’ in its investigation into the ‘ownership’ of 13 entities. What greater conflict of interest and mockery of justice is there?” Moitra asked.


Priyanka Chaturvedi, Shiv Sena (UBT) Rajya Sabha Member of Parliament (MP), said the Hindenburg Research’s report showed the extent of support that the top BJP leadership had given to its favourite industrialist.


Even institutions like Sebi were diluted by appointing allegedly compromised people, she said. “The quid pro quo circle gets wider and the modus operandi more sinister,” she added.


Buch and her husband Dhaval have rejected the claims made in the report, terming them “baseless allegations and insinuations”. “The same are devoid of any truth. Our life and finances are an open book,” they said in a joint statement.




 

First Published: Aug 11 2024 | 3:17 PM IST



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