Buy Trent; target of Rs 1198: Edelweiss Securities

Edelweiss Securities' report on Trent

We interacted with Trent CEO Mr. P Venkatesalu Highlights: i) Zudio as a format has stabilised, and the company is looking at its aggressive ramp-up (highlighted at AGM too). ii) The online strategy for Westside will be driven via Tata Cliq, own website & app (app in development), and Tata’s super app. No plans to launch on marketplaces. iii) Targeting ramp-up in grocery having found the right model for Star Bazaar. Booker’s expansion will leverage Star’s network.

Outlook

We believe Trent has established the viability for Zudio, and expect it to drive the company’s next leg of growth. We maintain our target multiple and an unchanged TP of INR1,198. Weak store economics for Zudio and e-commerce are the key risks. Maintain ‘BUY.

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