Buy Trent; target of Rs 1430: Motilal Oswal

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26 Aug, 2025 12:21

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Despite the adverse impact of COVID-19 over the last two years, Trent’s standalone revenue/PAT reported an encouraging CAGR of 11%/27% over FY20 to reach INR39b/INR2.5b, respectively, which was by far the best among peers. However, due to the increased losses in its subsidiary (Booker India), Trent’s consolidated PAT (post-minority interest) contracted to INR346m in FY22 from INR1.0b in FY20. Consolidated EBITDA (Pre IND-AS 116) posted a 7% CAGR to INR2.3b over FY20-22. Trent’s standalone revenue growth was fueled by Zudio’s stellar performance (topline up >2x to INR11b), well supported by Westside that matched its FY20 revenue of INR27.3b. This was backed by cumulative store additions of 170/40 by Zudio/Westside over the last two years, (191%/21% addition), respectively.

We have ascribed a 31x FY24E EV/EBITDA to the standalone business (Westside and Zudio, 15% premium for the last five years until the pandemic and 10% premium to our Retail coverage universe), 1x EV/sales to Star Bazaar, and 15x EV/EBITDA to Zara to arrive at our new TP of INR1,430 (revised up from INR1,180 earlier). Weak demand in the tier 2-3 cites as validated by our channel checks remains the key near-term risk. Retain BUY.

At 16:01 hrs Trent was quoting at Rs 1,064.00, down Rs 22.60, or 2.08 percent.

It has touched an intraday high of Rs 1,092.75 and an intraday low of Rs 1,064.00.

It was trading with volumes of 39,402 shares, compared to its thirty day average of 36,252 shares, an increase of 8.69 percent.

In the previous trading session, the share closed down 2.43 percent or Rs 27.05 at Rs 1,086.60.

The share touched its 52-week high Rs 1,347.10 and 52-week low Rs 830.05 on 07 April, 2022 and 17 June, 2021, respectively.

Currently, it is trading 21.02 percent below its 52-week high and 28.19 percent above its 52-week low.

Market capitalisation stands at Rs 37,823.87 crore.

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