Motilal Oswal's research report on Trent
Despite robust growth over the past few years (6.5x revenue growth over FY19-25), management indicated that Trent’s share in India’s fashion and lifestyle retail industry remains in low-single digits. The company believes there is still a long runway for growth and aims to grow at 25%+ annually over the longer term through a multibrand, cluster-based approach to increase its market share in key micro-markets. Management is cognizant of the impact on return metrics of their cluster focus approach, but believes there is enough headroom to drive operating leverage in the business. The company remains bullish on the growth opportunity in the Star format, but will continue to grow sensibly while focusing on the right economics and improving its differentiation through a rising share of non-third-party brands (73% currently).
Outlook
We continue to like Trent for its superlative execution and long growth runway. Reiterate BUY with an unchanged TP of INR6,900.
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