On the results of Trent Limited, brokerage firm Sharekhan opined that the company had a mixed performance in the fourth quarter (Q4FY2023). Double digit growth in revenue. Normalization of rents and changes in inventory provisions have led to a sharp decline in EBIDTA. Innovation in product portfolio, strengthening of supply chain, 100 per cent contribution of own brands, rapid store expansion and increasing exposure in digital space are expected to drive good growth in medium term.
A buy is recommended on Trent Limited given the long-term growth outlook and strong trading in the retail company. The target price for this is 1550 per share. A further rise in consumer inflation could be a major risk for the company. This will impact demand and may impact earnings outlook in the near term.
According to Nuwama Wealth Management, Trent’s performance has been strong. There is a huge growth of 75 percent in revenue on annual basis. The company is focusing on store expansion. The company’s EBITDA margin declined in the fourth quarter due to various reasons. The brokerage has recommended Buy on the company’s stock with a target of 1687 per share.
300 percent return in 5 years
Looking at the share trend chart of Tata Group, the stock has returned almost 300 percent in the last 5 years. That is, the value of this share of Rs 1 lakh 5 years ago is more than Rs 4 lakh today. Nuwama Wealth has set a target of 1687 after the fourth quarter (Q4FY2023) results. On April 28, 2023, the share price was Rs.1382. Thus, the stock may see an upside of around 22 percent from the current price.
For the quarter ended March 2023, Trent Limited’s net profit rose 40 percent to Rs 105 crore. A year ago, the company had made a profit of Rs 75 crore in the same quarter. The company’s revenue has increased by 75 percent to Rs 2077 crore in the quarter of December 2022 from Rs 1185 crore. Trent has declared a dividend of 220 per cent per equity share to shareholders.
RK Damani’s 1.5 percent stake
Legendary stock market investor Radhakishan Damani has invested in Trent Limited. Damani’s stake in the company is 1.5 percent (5,421,131 equity shares). This stock has been included in their portfolio for a long time. They did not make any change in shareholding pattern during March 2023 quarter. On April 28, Trent’s holdings were valued at Rs 741.5 crore.
What does the company do?
Tata Group operates retail business through Trent Limited. In Trent, the store operates in 5 different formats. In fashion retail there are Westside, Zudio (value fashion retail) and Zara JV (premium fashion retail).