Shares of Trent surged as much as 3 percent to Rs 6,078 on Monday, topping the Nifty gainers' list, as strong bullish calls drove fresh buying interest. The rally extended into a second session, bucking the broader market weakness amid lingering geopolitical tensions.
Last week, three brokerages issued bullish calls on the apparel giant. HSBC initiated coverage with a ‘buy’ rating. The brokerage sees strong growth ahead, driven by the rapid expansion of its value fashion brand Zudio. The brokerage expects Zudio to add around 200 stores annually between FY25 and FY28, driving the company’s expansion.
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HSBC also highlights that Trent’s price-to-earnings ratio of 2.4x is lower than peers like Vishal and Page Industries, despite stronger growth and profitability.
Macquarie also retained its ‘Outperform’ rating, citing the company’s ambitious plans to clock 25 percent annual sales growth over the next decade through new store openings, entry into adjacent categories, and tighter cost controls.
Morgan Stanley reaffirmed its ‘Overweight’ view on the stock on June 18. The brokerage noted the management’s continued confidence in achieving its 10x growth goal by FY32, balancing expansion with profitability. The company's plan to expand store count by 200 per year is possibly doable while ensuring quality, economics and location, the report quoted the brokerage as saying. It added that Trent's new stores reach very high throughput within 12-24 months of opening.
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Trent posted a 37 percent year-on-year jump in EBITDA to Rs 656 crore, well ahead of market expectations of Rs 580 crore. Margins also improved to 16 percent.
At about 12:40 pm, shares of the company were trading at Rs 6,060, higher by 2.75 percent from the last close. Trent shares are down nearly 15 percent since the beginning of the year.
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