Trent -- A value unlocking story from the house of TATA

Generic question - How can we find which of listed company shall own superApp? Or would it be unlisted or yet to be formed company? Similarly BigBasket Stake - which listed entity would buy it?

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Possibly because these ventures are still loss making.

It is housed under an unlisted company called Tata Digital; this company is working on the super app.

Big Basket would most likely be held directly by Tata Sons or some other unlisted company. Possibility of this coming to Trent or even Tata Consumer products is very slim.

Can u tell why Trent’s ROCE is 18% but ROE is 7% only? Nil Debt is one factor and other is they raised capital in 2019 . What are others?

Anyone aware of reason of recent run up of Trent in falling markets last few days? BB acquisition is via Tata group so is market considering some huge synergy of acquired BB (by other Tata Group company, maybe Tata digital) and Trent?
I am aware the recent results were also decent, just trying to figure out if I am not aware of any more business reasons or anything related to BB acquisition that may benefit Trent tremendously, because I had thought the acquisition was already priced in few weeks back.

Disc: Invested, biased. Not a buy/sell recommendation.

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There is rarely any solid rationale for re-rating in a bull market. To my view, this is just a catch-up rally. Trent hasn’t moved much in these bull run. And I am seeing a number of similar stocks, which didn’t participate in the rally previously, have moved up sharply in the last month. Examples are Shankara Building Products, Khadims, VRL Logistics etc.


My notes from the annual report:

  • Salary cuts: management -37%, other employees -9.3%, but can’t be naively compared due to incentive payments/overtime etc. In FY20, employees remuneration was raised by 12.8%, management was lowered by 8.3%.
Management Remuneration Change FY21 Remuneration Change FY20
Mr. N. N. Tata (33.71%) 16.97%
Mr. P. Auld (MD) (43.08%) (15.87%)
Mr. Venkatesalu (CFO) (24.77%) 12.43%
Mr. M. M. Surti (Secretary) (25.79%) (8.76%)
  • CSR spend was 3 Cr. 33% towards covid relief, 33% towards education.

  • Emerging themes that Trent expects to benefit from:

    • Women are being integrated into the formal workforce and have a greater control over personal and household financial decision making;
    • Rising disposable income and increasing spend on apparel, personal care;
    • Consumption rising across tier I-III cities;
    • e-commerce and social media presence influencing shopping trends;
    • Supply side innovations, improved manufacturing capabilities, efficient warehousing & distribution.
  • 75% of the addressable market is in mass priced / value fashion. (Will this percentage go down if their emerging trends are correct?)

Retail Outlets

Brand No. of stores FY21 No. of stores FY20 No. of stores FY19 No. of cities FY21 No. of cities FY20 No. of cities FY19
Westside 174 165 150 90 87 76
Zudio 133 80 40 57 44 25
Star 60 57 44 7 7 7
Zara 21 22 22 11 12 10
Booker 9 6 - 3 3 -
Landmark 6 4 5 4 3 4
Utsa 4 3 - 4 2 -
Massimo Dutti 3 2 3 2 2 2
  • Zudio is expanding the fastest, kept up the pace during pandemic year.
  • Star is present in 7 cities, increasing footprint in those 7, not in new ones. Same takeaway for Booker.
  • Zara numbers are bizarre. It looks like they closed two stores in FY20 and opened two more in different cities, leaving the overall number unchanged. Then in FY21, they closed down one store. Similar story with Landmark, number of cities dropping from 4 → 3 → 4.


  • Over 85% of merchandise is sourced from within India.

  • Business model based on in-house design, allows for fast conversion from concept to products. (Pay attention to design team attrition / taste)

  • Objective is to make our stores well laid out and easy to navigate, providing a curated “fashion theatre” experience.

  • Active management of store portfolio. Sales / sq. foot is important metric to management and give differentiated space to high value brand, reviewing this constantly. Constantly thinking of in-store experience regarding lighting, mirrors, spacing, etc.

  • The club membership has been covered before. 5% of sales came through online channels with online sales growing at 150% during Q4.

  • Spend per bill up 9% over FY20.

I noticed their new website was identical to Zara’s international website before Zara’s latest update.

And here’s the updated Zara one:


  • Value offerings, completely in-house design.
  • The offerings are constantly refreshed with the aim to provide new and updated merchandise to customers on every visit.


  • Largest stores present in malls.
  • The total comprehensive losses decreased to ₹ 97 Crores in FY21 from ₹166 Crores in FY20 on the back of emphasis on sharp pricing, moderation of marketing and other operating expenses.
  • We now directly engage with over 800 farmers and a majority of vegetables & fruits in our stores are directly sourced and serviced through a network of collection / distribution centres.

Zara / Massimo / Booker

  • During the year under review, the Zara entity recorded revenues of ₹ 1,126 Crores and Loss after Tax of ₹ 41 Crores. The incremental store openings for Zara continues to be calibrated with focus on presence only in very high-quality retail spaces.
  • Required to source merchandise only from the Inditex Group. Also, the choice of product & related specifications are at latter’s discretion.
  • Booker has products in categories across staples, processed foods, confectionery, personal care, home care, soft drinks, dairy etc. The concept serves kirana stores, traders, wholesalers, small businesses, hotels, restaurants and caterers.
  • BIL also offers private labels with a quality and affordability proposition, helping improve margins and cash profit for store partners. While these stores are independently run and owned, they carry BIL’s ‘Happy Shopper’ branding. BIL currently serves more than 330 such stores.
  • The sales per square feet improved by over 25% across the portfolio to over ₹ 30,000 during the year(BIL). We believe that the stores have significant head room for growth in the immediate catchments and can be further augmented by a delivery proposition for secondary catchments. BIL plans to replicate its high volume, low cost, asset light model across select geographies.

Haven’t gone through the balance sheet for the year in complete detail, short notes:

  • Biggest expense is on rent.
  • Have around 500Cr. in mutual funds.

Takeaways from ICICI’s research report (Please let me know if paraphrasing breaks forum rules and I will delete.)

  • Zudio stores are ~6000 sq. feet, 66% of products priced less than 500 rupees.
  • Expecting 230 Westside stores and 243 Zudio stores by end of FY23.
  • ICICI estimates topline to be 5200 Cr. by end of FY23 compared to ~2600 Cr. presently.
  • Expecting near term headwinds and have brought down revenue estimates for FY22 to ~4000 Cr.

Disclosure: invested.


After lot of time, I was looking over strategy of Trent. I noticed a positive surprise that Tata CliQ, launched by Tatas back in somewhere around 2016 or so and owned by Tata Unistore - is a joint venture between Tata Industries and Trent!

Off late Tata CliQ seems to be doing significantly well. I tried to find exact ownership structure but couldn’t so far. At best could find that lion’s share of 90% is held by Tata Industries. It leaves a significant minority 10% stake with Trent in this upcoming Online marketplace. However, there were some rights issues of the parent Tata Unistore in last couple years to which I think only Tata Industries applied…so not sure on final ownership by Trent.

Also, earlier Tata CliQ seemed to sell exclusive Westside merchandise but that also changed eventually and most recently Trent launched the sales of which were growing at almost 30% mom recently…

@Chins others who have more knowledge on the ownership structure and roadmap of Tata Unistore/Tata CliQ …do pitch in.

Disc. Invested. Not a buy/sell recommendation. Post for academic purposes to learn more about ecommerce strategy of Trent



As you’ve mentioned, Tata Unistore is owned by Trent and Tata Industries. Trent lists the ownership in terms of fair value in the annual reports. Let’s see how the fair value has changed over time:

From AR21:

From AR19:

From AR16:

Tata Unistore itself used to be called Tata Industrial Services, which was in defense/aerospace in the late 2000s.

So a summary of Tata Unistore’s fair value:

Tata Unistore FY21 FY20 FY19 FY18 FY17 FY16
Value in Cr. 201.39 86.98 86.73 58.66 36.03 18.66

This implies a CAGR of 60.93%.


Wow! This is the best which one could have researched and presented! Appreciate the way you look into such details.

Almost 61% CAGR is really good. If this continues with similar pace, very soon Tata Unistore stake would look very meaningful in their balance sheet. Please correct me if wrong.

I am just trying to think if this stake in Tata CliQ, along with the emergence of Super App is something meaningful for Trent/ big value unlocking in due course of time or not…

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If we assume Trent has 10% ownership in Tata Cliq, they think fair value is 2000 Cr. and Trent’s ownership of Tata Cliq is currently worth 0.5% of its market cap.

One has to first ask what Tata thinks fair value is. From some news articles, Tata Cliq had a revenue of 226 Cr. in FY20, so Trent’s valuation was at 3.84x sales (Fair value of 86.98 Cr.), ignoring intangibles (Loss making, so can’t use any other metrics). If anyone finds information for FY21, we can compare that too, but one can ballpark this to roughly 520 Cr. in revenue if the FY21 valuation is still at 3.84 x sales.

If Trent’s holding value in Unistore is to be meaningful, Tata Cliq would have to increase revenue to over 3000 Cr, and that would result in a carried value of some 1200 Cr, or 3.24% of Trent’s market cap.

To be honest, I haven’t followed Unistore or Tata Cliq, but I wouldn’t be surprised if there was a multifold jump in revenue ever since the pandemic, and other e-commerce players are trading at much higher multiples, so one can say that Trent is being incredibly conservative with their estimates of fair value.


Although not directly comparable, but one of listed consumer tech company Zomato had FY21 revenue of approx. 1600 cr. With a mcap of 1Lakh 4K Cr, it is valued at approx 65X its FY21 revenue.

From what I read about Tata CliQ, they have been following a more sustainable towards profitability business model unlike other marketplaces.

Cannot agree more that with a mere 3.84X sales, the valuation of an upcoming market place from the house of Tatas, with a synergy of Tata ecosystem & upcoming SuperAp, is extremely conservative.

Even Indiamart in B2B is a 25000 Cr mcap company with revenues of approx 660 cr, it is a 37X revenue!


Trent is expanding its store aggressively, any views on it? Will it lead to more expenses to run new stores? Pls share your view for short term and long term. Thanks.

Disc: invested


I did an Intrinsic Valuation of Inditex Trent Retail India Private Limited - an Associate of Trent Ltd to run Zara stores in India. They have 49% stake in the associate. Surprisingly, I found out that Inditex (Zara) generates about 35% of value in Trent Ltd, in other words, Zara is a big reason why people are high on Trent Ltd. Is it true? Right now, in terms of Trent Ltd.'s own business, they are earning less than their cost of capital.

Disclosure: Not Invested and not planning to invest either.

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The Ken had covered Westside, Zudio and parent Trent in depth in its story yesterday. It’s behind a paywall, but here are the summary points.

  • Zudio’s store count has surged over 3X to 250 since March 2020
  • The value-fashion chain clocked Rs 1,100 crore ($138 million) in sales in FY22–a quarter of Trent’s consolidated revenue
  • Even if it’s much smaller than Westside now, at this rate, it could end up becoming Trent’s biggest brand

Recently I was amazed by the crowd inside a Zudio store with young people flocking and billing counters completely clogged. Guess they need faster billing process/counters etc. to match the demand…in short, Zudio was looking like the Dmart of fashion…no doubt its 1/4th of Westside in short span.

The beauty of a resilient group, management is such that what they built in 25+ years, they replicate in next 5+…

Disc: Invested & Biased. No buy/sell recommendation


Zudio is loss making entity.

Even, management has mentioned that they have not yet find the best ideal / suitable model for Zudio (offering low prices while still making profit) and they still are experimenting.

Tata has also launched their own saree store. Through it is still in trial phase and has very limited store count, it seems they are trying every category (which is a good thing IMO)


Yes but EBITDA breakeven has been achieved.

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3.2% sold for approx. 25 cr valuing Tata Cliq at mere approx. 782 Cr

Is this valuation not too less as compared to many other ecommerce platforms listed as well as unlisted?