Axis Securities released its preview for the FMCG and retail category ahead of the first quarter earnings on Wednesday.

What Happened: The brokerage expects FMCG companies to witness a recovery while the retail sector will likely deliver a mixed-bag performance. Tata Group's Trent was one of Axis' top picks in the retail segment while Nestle, Colgate and Britannia are likely to be the positive players among the consumer staples.

"Premium retailers such as Trent and Ethos are anticipated to perform better while value retailers (Relaxo, V-mart, D-mart) will see gradual recovery," Axis said about the retail industry.

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The brokerage delivered an upbeat forecast for Trent's key financial metrics for the upcoming results. The company's healthy growth in revenue is expected to continue due to store expansion. The analysts see a revenue of ₹3,805 crore, 50% higher on a year-on-year basis. EBITDA margins are anticipated to rise due to robust operating leverage. The firm will likely deliver a profit after tax of ₹323 crore, a nearly 118% increase from a year before, it said.

The company's outlook on demand in Metro cities and tier 2 and 3 towns will be a key metric Axis Securities will be looking at ahead of the festive season. It will also watch out for Trent's guidance on further store expansions.

Price Action: Shares of Trent settled 0.81% lower at ₹5,547.80 on Wednesday.

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