Stock To Buy: Brokerage Bullish On Multibagger Large Cap Tata Stock, Target Price Rs 1670

Brokerage firm Bonanza has picked Tata Group Stock, Trent Ltd with a target price of Rs 1670 apiece. The current market price of the stock is Rs 1468 apiece with a market capitalisation of Rs 52,196.22 crore. If you buy Trent today, you can get 14% return.

According to the analyst, "Trent Ltd. - the Retail arm of Tata Group, has shown tremendous growth in past years with Topline rising from ₹ 2,157 Cr in FY18 to almost double at ₹ 4,498 Cr in FY22 (61% CAGR) and store expansion to 500+ stores on consolidated basis."

1. Trent Ltd Stock Performance & Return

The current market price of the stock is Rs 1468 apiece with an intraday gain of 0.40%. The stock's 52-week high is Rs 1571 apiece and 52-week low is Rs 971 apiece, respectively. The stock has given multibagger returns in last 5 years. It has given 347% return in last 5-years, 179% return in last 3-years, and 42% in last 1-year.

2. Outperformance Continues As Trent Records A Robust Quarter

Trent has delivered yet another robust quarter with Revenue up to almost ~2.2x from Pre-Covid levels at ₹ 1,813.6 Cr and Gross Profit margins sustained at 48% as of Q2 FY23, while the EBITDA margins on the other hand saw a drop at 17% down by 500 bps YoY and 200 bps QoQ due to higher OPEX on account of aggressive store additions.

3. Valuation

According to Bonanza, "Trent's dual growth engines - Westside & Zudio having sizable footprint expansion, robust LFL recovery and strong topline growth have huge potential for growth. We expect Trent to deliver Revenue/EBITDA/PAT CAGR of 61%/14%/88% respectively from FY22-25E and powerful Return ratios to sustain with ROE/ROCE expected to reach 11%/24% respectively by FY24E. We initiate coverage with a BUY with a Target Price of ₹ 1,670 (151x 10 yr avg. P/E for FY24E forward EPS of 11.1)."

4. About Trent Ltd

Established in 1998 and part of the Tata group, Trent is headquartered in Mumbai but has pan-India operations. Trent is one of the leading players in the branded retail industry in India. The company primarily operates stores across four formats. Westside offers an exclusive range of its own branded fashion apparel and is the mainstay of the retailing business of the company.

The company has already established 174 Westside stores across 90 cities. Zudio offers irresistible fashion at irresistible prices. The company has established 133 Zudio stores across 57 cities. Star, is a fresh food and grocery retail chain, operating 60 stores across 7 cities. Landmark, a family entertainment concept, operates through six independent stores and retailed through select Westside locations, according to its official website. 

Disclaimer

The stock has been picked from the brokerage report of Bonanza. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.