Buy Trent; target of Rs 4870: Motilal Oswal

Motilal Oswal's research report on Trent

TRENT reported strong standalone revenue growth of 53% (in line) in 4QFY24, led by 10% LFL and 37% YoY store additions. Robust revenue
growth, along with GM improvement and operating leverage, resulted in 2.3x/2.4x YoY growth in EBITDA/PAT (11%/31% beat).Considering strong revenue growth, aggressive store additions, margin tailwinds from moderating RM costs, and operating leverage, we estimate a CAGR of 32%/38% in revenue/PAT over FY24-26. The continued momentum in Star and improving store metrics offer further upside potential.

Outlook

We reiterate our BUY rating with a revised TP of INR4,870, given TRENT’s strong growth opportunity going forward.