Shares of Trent, the Tata Group company, rallied over 8% to hit an all-time high of Rs 4,670 on NSE, following the company’s stellar performance during the January – March period.
Trent’s share price surged after its Q4 result showed a multi-fold jump in consolidated profit while revenue jumped over 50% for the quarter.
On Monday, April 29, Trent reported a robust 51 per cent year-on-year (YoY) jump in revenue from operations for Q4FY24 to Rs 3,297.70 crore against Rs 2,182.75 crore in the same quarter last financial year.
The Tata Group’s speciality retail company, known for brands like Westside and Zudio, reported a remarkable surge in consolidated net profit for Q4FY24, reaching ₹712.09 crores.
This represents an extraordinary year-on-year increase of nearly 16 times, or a staggering 1,484 per cent jump, compared to a profit of Rs 44.95 crore in the corresponding quarter of the previous year.
The company’s profit shot up in the last quarter due to a one-time gain of Rs 543 crore. This boost came from a change in how they handle lease contracts for their stores. They reviewed and adjusted how they measure and recognise these contracts, leading to a significant gain for the quarter.
Brokerages on Trent
Motilal Oswal on Trent
Motilal Oswal’s latest analysis of Trent reveals adjustments in key estimates alongside a bullish outlook for the company’s future performance.
While maintaining revenue and EBITDA estimates, Motilal Oswal has raised standalone PAT estimates by 9% for FY25 and 7% for FY26. This revision is attributed to a reassessment of lease liability.
Over the period spanning FY24 to FY26, Motilal Oswal anticipates a Compound Annual Growth Rate (CAGR) of 32% for standalone revenue, 30% for EBITDA, and 38% for PAT. This growth trajectory is expected to be driven by a robust 20% year-on-year footprint addition and healthy Same Store Sales Growth (SSSG).
Motilal Oswal assigns a valuation of 50x EV/EBITDA to Trent’s standalone business, comprising Westside and Zudio. This valuation reflects a premium over the retail coverage universe, reflecting the company’s superior growth prospects.
Additionally, Star Bazaar is valued at 2x EV/sales, while Zara is valued at 15x EV/EBITDA for FY26E. Based on these considerations, Motilal Oswal arrives at a Target Price of Rs 4,870.
Even after adjusting the values assigned to Star and Zara, the stock is seen trading at 75x FY26E earnings per share (EPS) of the standalone business. Motilal Oswal reiterates its BUY rating on the stock, underscoring confidence in Trent’s potential for future growth and value creation.
Equirus Securities on Trent
Equirus Securities maintains an ‘ADD’ recommendation on Trent. The brokerage has set a one-year forward Target Price of Rs 4,719 based on the Sum-of-the-Parts methodology, rolled over to June 2025. This represents an upward revision from the previous target price of Rs 3,837, as of March 2024.
Equirus Securities, in its latest analysis of Trent, has made notable adjustments to its estimates, primarily focusing on revenue, EBITDA, and PAT for FY25 and FY26. While maintaining revenue and EBITDA estimates, the brokerage has raised its PAT estimates to account for the revaluation of ROU (Right-of-Use) assets.
The current valuation reflects the ongoing momentum and growth prospects of Trent. Equirus Securities emphasizes that the prevailing valuations adequately consider these factors.
Trent 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 15.02% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 23.58%, indicating a strong upward trend.
Year-to-date, Trent shares have surged by 48.91%, 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 217.84% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.
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