Shares of Trent jump 5%
Shares of Tata group company Trent gained more than 5 percent on December 15 after a Bloomberg report said the group was looking to “reclaim ground in the beauty business it exited 23 years ago”.
The stock hit an intraday high of Rs 1,085.55 on the BSE, about 85 percent off its 52-week low. At 10:31 hours, the stock was trading 4 percent higher at Rs 1,071.40.
Non-executive chairman of Trent Noel Tata told Bloomberg that beauty products will be a key focus for the company along with footwear and underwear.
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The retail vertical of the Tata group is known for its brands Westside, Star Bazaar and Landmark.
“Extended product line and experimentation with formats for these products are in the offing as we see these as growth areas in retail,” Tata told the business publication.
The group had exited the space after selling Lakme to Unilever Plc in 1998. However, the beauty and cosmetics segment has been seeing renewed interest in recent times, especially with the listing of omnichannel retailer Nykaa.
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The revenue from beauty, footwear and underwear category is around $ 100 million for Trent, while the market currently stands at $ 30 billion, the report said.
Foreign brokerage HSBC expects the Indian beauty and personal care market to grow 6 times in the next 15 years, largely driven by e-commerce with online penetration rising from 8 percent to 35-40 percent in the next decade, leading to an over 30 percent CAGR.
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The group is looking at building new lines of in-house cosmetic brands, which could be retailed through existing large-sized outlets under Westside or via standalone stores and through digital channels, Tata told Bloomberg, adding that they will not resort to deep discounting.
“Innovation in the product portfolio, scaling up of the supply chain, 100% contribution from own brands, aggressive store expansions and leveraging on digital presence will be key growth drivers in the medium term,” brokerage Sharekhan by BNP Paribas had said in a post earnings note on Trent last month.
