Trent Limited shares started the day on a bullish note, climbing over 4% to Rs 7,939 in morning trade on September 26. The surge followed international brokerage Citi’s initiation of coverage on the stock with a ‘buy’ recommendation, citing robust growth triggers ahead for the company.
Citi’s Target and Growth Potential
Citi has set a target price of Rs 9,250 for Trent, implying an upside potential of 21.5% from the stock’s last close at Rs 7,615 on the NSE. Trent shares have already shown impressive performance this year, rising a remarkable 150% since the start of 2024.
Trent is leveraging its strong supply chain and key insights from its popular retail formats Westside and Zudio, while also successfully turning around its Star Bazaar business.
According to Citi, the company is well-positioned to scale up other pilot projects, such as MISBU, Samoh, and its joint venture with MAS. These initiatives have led Citi to include Trent in its Pan-Asia high-conviction focus list, reflecting its confidence in the company’s future growth trajectory.
Multi-Format Expansion and Financial Performance
Citi highlighted Trent’s transformation from a single-format to a multi-format retail player as a key driver of its success. This strategic shift helped the company achieve a 36% compound annual growth rate (CAGR) in revenue from FY19 to FY24.
As a diversified player in fashion, lifestyle, grocery, and personal care categories, Trent has posted industry-leading financial metrics, with revenue, EBITDA, and PAT CAGRs of 41%, 44%, and 56%, respectively, for FY24–27.
Earnings Beat Expectations
In the first quarter of FY24, Trent reported a consolidated net profit of Rs 392.6 crore, representing a 126% increase from Rs 173.48 crore in the same period last year.
The company’s earnings surpassed Street expectations by a significant margin. Revenue from operations came in at Rs 4,104.4 crore, a 56% jump from Rs 2,628.37 crore in the corresponding quarter of the previous financial year.
Stock Performance in Last One Year
In terms of stock performance, Trent shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 14.43% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 104.21%, indicating a strong upward trend.
Year-to-date, Trent shares have surged by 164.15%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 268.67% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.
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