Trent Ltd, a Tata Group retail giant, delivers strong growth, with soaring stock prices and promising future expansion prospects.
Trent Ltd is one of the most popular and coveted retail ventures of the Tata Group. The company is the flagship retail venture, which has grown into a major destination in the fast-emerging Indian retail scenario. It is one of the best stocks in the market to invest in, providing impressive results and returns to its shareholders through prudent expansions and efficient supply chain management. The stock has gained an all-time high price on the Bombay Stock Exchange (BSE) at ₹7,939 after the global brokerage firm Citi gave a bullish ‘buy’ recommendation for it. This fabulous performance makes Trent one of the most lucrative investments from the Tata Group, with a multi-fold increase in the share price within the last few years.
Growth at the Citi price target
At a time when its peers are looking to adjust to the shifts in consumer spending behavior, Citi’s endorsement of Trent Ltd is a vote for a company on a sound growth trajectory. The brokerage initiated coverage of the stock with a price target of ₹9,250—a projected 21 percent upside from the previous close. The optimism on Trent’s prospects lies in the transformation of a single-format retailer into a multi-format giant. The shift has helped diversify revenue streams for the company. It leverages different segments in retail, such as fashion, lifestyle, and grocery.
Over the last three years, Trent Ltd has given staggering returns of more than 700%. The two-year rise in its stock price has been an impressive 463%. This is because of the success of its major retail brands like Westside, Zudio, and Star Bazaar, as well as newer ventures, including MISBU, Samoh, and a joint venture with MAS.
Key Financial Performance Indicators
Numbers tell a tale of the spectacular growth story about Trent. Consolidated net profit clocked 225% year-over-year growth at ₹391 crore for the June quarter of FY24. Revenue grew by 56% to ₹4,104 crore, from ₹2,628 crore on a like-for-like basis in the same period last year. EBITDA, earnings before interest, taxes, depreciation, and amortization, zoomed 199% to ₹400 crore, while much more impressively, the EBITDA margin improved with great operational efficiency and profitability for the June quarter. By any industry standard, Trent’s performance metrics are pretty impressive. Here, from FY19 to FY24, the revenue CAGR is pegged at 36%. Hence, from FY24 onwards, the company will most certainly continue picking up and growing its revenues, EBITDA, and PAT with CAGRs of 41%, 44%, and 56% respectively from FY24 to FY27. Growth Here shall be majorly backed by Trent’s capacity to innovate and scale across its various retail formats.
The stock performance of Trent at the BSE and NSE is as follows:
The share price of the Tata Group’s Trent Ltd has been going upwards and outperforming the broader market persistently. On the BSE, the stock is now holding a fresh all-time high at ₹7,939, with low volatility as the beta stands at 0.8 and has strong technical indicators. The RSI stands at 77.4, which spells that it is in overbought territory; however, still enjoys a bullish trend across short-term and long-term moving averages.
The company traded way over its 5-day, 10-day, 50-day, and 200-day moving averages in the last year. This speaks a lot about investor confidence in the company. As of market capitalization, Trent stands at ₹2.78 lakh crore, one of the strongest employers in the Indian Retail terrain. Its 52-week low was at ₹1,946.5 in October 2023.
Conclusion
Trent Ltd has done well and it reflects how Tata Group could continue to boom in the Indian retail sector. Its achievements are mainly achieved through its ability to adapt to market dynamics, diversify the portfolio, and scale new businesses. This Tata Group stock remains a buy for investors as its strong fundamentals, bright prospects, and continued leadership in the retail sector make it quite compelling. As Trent Ltd builds further on the skill of multi-format retailing, it is well-positioned to generate further shareholder value.
