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Business News/ Markets / Stock Markets/  Trent share price jumps another 9% to 52-week high after Q3 results; up 26% this week; Should you buy?
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Trent share price jumps another 9% to 52-week high after Q3 results; up 26% this week; Should you buy?

Trent’s standalone business SSSG was aided by emerging categories such as BPC, innerwear and footwear. These categories contributed to 19% of standalone revenues.

Trent stock price has rallied 26% this week so far, while the stock is up nearly 60% in the past three months.Premium
Trent stock price has rallied 26% this week so far, while the stock is up nearly 60% in the past three months.

Trent share price extended rally to hit a fresh 52-week high on Thursday after the Tata Group company reported strong Q3 results. Trent shares jumped as much as 9.04% to a new high of 3,935.85 apiece on the BSE.

Trent stock price has rallied 26% this week so far, while the stock is up nearly 60% in the past three months.

In the quarter ended December 2023, Trent’s net profit more than doubled as it grew 140% to 370.6 crore from 154.8 crore in the year-ago period.

Revenue in Q3FY24 jumped by 50.5% to 3,466.6 crore from 2,303.4 crore, year-on-year (YoY).

Trent’s standalone business SSSG was aided by emerging categories such as BPC, innerwear and footwear. These categories contributed to 19% of standalone revenues.

Read here: Trent Q3 Results: Net profit doubles to 370.6 crore; revenue up 50% YoY; stock jumps over 19%

Most brokerages raised target price for Trent shares after the announcement of Q3 results. Here’s what brokerages said:

Kotak Institutional Equities

Trent reported a strong performance in 3QFY24, belying the slowdown in consumption spends yet again. Store expansion of Zudio and 10% SSSG in fashion concepts drove revenue growth. Better-than-expected gross margin and lower rentals and other expenses led to a 7% beat in EBITDA. New concepts in ethnic wear and innerwear may keep the revenue trajectory higher for longer, Kotak Institutional Equities said.

It raised FY2024-26 EPS estimates by 15-18% on account of strong 3Q margins and sustained growth momentum. It maintained an ‘Add’ rating on the stock and raised the target price to 3,800 per share from 2,700 earlier.

Motilal Oswal Financial Services

Based on strong revenue productivity, aggressive store additions, margin tailwinds from moderating raw materials costs, and operating leverage, Motilal Oswal Financial Services has modeled 30% and 31% revenue and EBITDA CAGR over FY24-26. The continued momentum within Star and improving store metrics offer further upside potential.

The brokerage reiterated its ‘Buy’ rating and raised the target price to 4,200, given TRENT’s strong growth opportunity going forward.

Nuvama Institutional Equities

Trent delivered another spectacular performance in Q3FY24 with EBITDA and PAT beating our estimate by 21% and 34%. The strong performance drives a reset of margin expectations, leading to a 20% and 24% increase in EPS for FY24E and 25E, said Nuvama Institutional Equities.

Valuing Trent’s standalone business at 80x FY26 PE and ascribing a separate value to subsidiaries/JV yields, the brokerage firm raised the target price to 4,304 from 3,530 earlier. It maintained a ‘Buy’ call on the stock.

Also Read: Lupin share price rises up to 6.6%; scales 52-week highs post Q3 Results as net profit jumps four folds

Antique Stock Broking

Trent delivered a robust outperformance during the quarter in a challenging macro environment. Revenue growth was strong at 53% YoY (LTL growth of 10% YoY) while EBITDA margin expansion was ahead of our expectations driving 86% EBITDA growth. Despite the aggressive store addition, strong growth in fashion concept has more than offset the increase in overhead costs, driving profitability improvement, said Antique Stock Broking

Overall, the brokerage remains optimistic about Trent’s future growth potential. Factoring the outperformance, it increased FY24/ FY25/ FY26 EBITDA estimates by 11%/ 13%/ 12% respectively.

Any material improvement in the profitability of Star Bazaar (aided by improving like-to-like store growth) could be an added re-rating trigger going ahead, which we have not factored in currently, Antique Stock Broking said.

Due to rich valuation, it maintained a ‘Hold’ recommendation and raised the target price to 3,385 per share from 3,082 previously, based on FY26E SoTP valuation

Trent shares have given multibagger returns in the past one year as they have soared 215% during the period. 

At 12:25 pm, Trent shares were trading 7.13% higher at 3,866.55 apiece on the BSE.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 08 Feb 2024, 12:26 PM IST
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