Trent shares are showcasing relentless momentum in the market, achieving new milestones with each passing month as investors flock to acquire ownership in this Tata Group company. In today’s trading session, the stock surged by another 3.4% to reach a fresh record high of ₹5,509 apiece, driving the company’s market capitalisation to ₹1.95 lakh crore.
Remarkably, Trent crossed the ₹1 lakh crore market cap mark in December last year, adding another ₹95,000 crore in less than seven months.
This impressive performance reflects Trent’s sustained upward trajectory since December, consistently closing each month with gains. As a result, the stock has appreciated by 95% during this period.
Looking even back, the stock has been maintaining a strong upward trend since January 2023, resulting in a remarkable gain of 358% to date.
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Despite this impressive performance over a relatively short period, analysts maintain a positive outlook on the stock’s valuations. They believe that the company’s robust growth justifies its premium valuation in the market.
The company operates a portfolio of retail concepts. The primary customer propositions of Trent include Westside, one of India’s leading chains of fashion retail stores, Zudio, a one-stop destination for great fashion at great value and Trent Hypermarket, which operates in the competitive food, grocery, and daily needs segment under the Star banner.
Analysts expect continued momentum
Trent continues to outperform the discretionary category with exceptional resilience, according to Motilal Oswal’s recent report. Despite overall muted demand in the sector, Trent has achieved industry-leading like-for-like (LFL) growth of +10%, significantly enhancing its market share in the apparel segment, particularly in the value format.
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The company’s strong performance is attributed to robust same-store sales growth (SSSG), efficient store operations, and the successful positioning of Zudio as a compelling value proposition.
Motilal Oswal highlights Trent’s prudent expansion strategy, which includes aggressive store additions without compromising its financial health or operational efficiency. The brokerage forecasts a substantial growth trajectory over the next three to five years, estimating a CAGR of 36% in standalone revenue and 34% in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) from FY24 to FY26.
This growth outlook supports the premium valuation of the stock, with Motilal Oswal assigning a target price of ₹5,800 based on 57x FY26E EPS for the standalone business, alongside separate valuations for Star Bazaar and Zara.
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Phillip Capital also maintains an optimistic view on Trent, emphasising the company’s strong financial fundamentals, including healthy cash flows, a lean balance sheet, robust return ratios, and solid profitability.
Despite the premium valuations, Phillip Capital underscores Trent’s resilience and strategic strengths, reaffirming a ‘buy’ rating with a target price of ₹5,811 based on September 2026 projections.
However, the brokerage acknowledges potential risks such as weak demand in Tier 2–3 cities and the gradual turnaround of Star Bazaar.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 28 Jun 2024, 01:00 PM IST
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