Limited Period Offer:Be a PRO for 1 month @Rs49/-Multiple payment options available. Know More

Neutral Trent; target of Rs 620: Motilal Oswal

Motilal Oswal recommended Neutral rating on Trent with a target price of Rs 620 in its research report dated July 23, 2020.

July 24, 2020 / 04:42 PM IST
  • bselive
  • nselive
Todays L/H

Motilal Oswal 's research report on Trent

Trent’s consolidated revenue/PAT grew 33%/9.2% to INR34.9b/INR1.1b in FY20. Standalone revenue growth of 26% was led by strong performances from Westside (+16%) and Zudio – its freshly established Value Fashion Retail brand (+2.5x, 16% contribution). The brands were supported by strong same-store sales growth (SSSG) and store adds. While the current COVID-19 situation has impacted store adds, the management’s comments have eased some concerns. A) India’s Retail industry ranks among the top 5 retail markets globally (consumer category targeted by Westside). B) Value Fashion accounts for ~75% of the market (consumer category targeted by Zudio). C) The industry focus is on supporting in-house brands in achieving margin accretion and better control over the product life cycle (100% private labels). These three factors underscore TRENT’s growth levers. The company revealed that 70 stores had resumed operations on the easing of the COVID-19-led lockdown, but our channel check suggests >200 stores (~80%) are now operational.


We value Westside and Zara at 35x EV/EBITDA (five-year average multiple and 25% premium to our retail universe given its better execution and balance sheet) and Star at 1x EV/sales on FY22E. Thus, we arrive at TP of INR620, leaving limited upside. Subsequently, we downgrade to Neutral from a Buy rating.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.
Broker Research
first published: Jul 24, 2020 04:42 pm

stay updated

Get Daily News on your Browser