300% Returns In 12 Months: Tata Group Stock Trent Hits 52-week High, Surpasses D-Mart In Market Cap

Tata Group-owned Trent has officially overtaken Avenue Supermarts, the parent company of popular hypermarket chain D-Mart, in terms of market capitalisation. The shift comes after Trent's shares continued to surge, while Avenue Supermarts saw its steepest single-day decline since January 2019. The fall in D-Mart shares was triggered by underwhelming September quarter results, which fell short of market expectations and led to multiple downgrades by analysts.

As of Monday, Trent's market capitalisation is inching closer to the Rs 3 lakh crore mark, putting it ahead of Avenue Supermarts by nearly Rs 20,000 crore. This marks a turning point for the two retail giants, as Avenue Supermarts was once valued far higher than Trent. In fact, when Avenue Supermarts was listed on the stock exchange in March 2017, its market capitalisation was around Rs 40,000 crore, dwarfing Trent's valuation of just Rs 8,228 crore at the time. The gap between the two widened further when Avenue Supermarts reached its peak in October 2021, with a valuation more than Rs 3 lakh crore higher than Trent's.

Avenue Supermarts, owned by billionaire Radhakishan Damani, has long been a favourite among investors for its rapid expansion and robust financials. The company's shares famously doubled on their debut, and its hypermarket chain, D-Mart, became a household name across India. However, the stock has struggled in recent months, with a 20% decline from its September peak reducing its year-to-date gain to just 3%.

The company's September quarter results were a key factor in the recent slide. Avenue Supermarts failed to meet market expectations, leading to a wave of downgrades from major brokerages. This resulted in the stock plummeting over 8% during early trading hours on Monday, with shares trading at Rs 4,194.6 on the National Stock Exchange (NSE) as of 12:10 pm. Despite this recent dip, Avenue Supermarts has still delivered returns of more than 16% over the past year.

In contrast to Avenue Supermarts, Tata Group's Trent has been on an upward trajectory, with its shares rallying over 170% since the start of the year. The company, which operates the popular Westside and Zudio retail chains, has capitalized on its value-for-money strategy, particularly through the expansion of its Zudio brand. Trent opened 193 new Zudio stores in the last financial year, bringing its total store count to 545 across 164 Indian cities.

Trent's financial performance has also been stellar. The company's net profit for the year more than tripled to Rs 1,487 crore, supported by a 50% increase in revenue, which stood at Rs 12,368 crore. This impressive growth has set Trent apart from its competitors, as it continues to expand while other retailers struggle to maintain their market position.

Adding to its momentum, Trent recently ventured into the lab-grown diamond (LGD) market with the launch of its new brand, Pome. Available in select Westside stores, Pome is expected to follow a similar growth trajectory as Zudio. According to a report by Kotak Institutional Equities, Pome has the potential to revolutionize the LGD jewellery market, much like Zudio did for budget fashion. The report also suggested that Trent could scale up Pome in the next 1-2 years through the rollout of exclusive brand outlets.

On Monday, Trent shares hit a new 52-week high of Rs 8,345 per share during early trading hours and were seen at Rs 8,247 per share on the NSE by 12:10 pm, with minor gains of 0.15%. The stock has delivered multibagger returns of nearly 300% over the past year, making it one of the best-performing stocks in the retail sector.