Buy Trent; target of Rs 5838: Sharekhan

Sharekhan's research report on Trent

Trent registered consistent strong performance for the past four years (FY2020-24) with revenues and PAT clocking CAGRs of 39% and 62%, respectively, backed by strong store expansions and consistent double-digit SSSG. Same-store-sales grew by over 10% in FY2024; sales per sq. ft and volumes for all fashion and lifestyle concepts grew by 23% and 74%, respectively. Working capital days reduced by 10 days to 28 days in FY2024; OCF to EBIDTA improved to 70%; RoE and RoCE improved to 28.4% and 24.5% respectively.

Outlook

We retain Buy rating on Trent with a revised PT of Rs. 5,838. Consistent industry outperformer and strong growth levers makes it a strong play in lifestyle fashion space. Stock trades at 58x/44x its FY2025E/26E EV/EBITDA, respectively.

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