Bullish Brokerage Calls Propel Trent Shares Up by 8% Since June 18

Trent shares have jumped nearly 8% since June 18, and investors are taking notice. This sudden rise didn’t happen by chance. Big brokerage firms gave a thumbs-up to the stock, and the market responded quickly.

Trent Limited, part of the Tata Group, is known for its fashion retail brands like Westside and Zudio. As more people shop smart and look for budget-friendly fashion, companies like Trent are gaining ground.

We’ve seen brokerages raise their target prices for Trent. They believe the company is growing fast, managing its stores well, and making profits in a tough retail space. These expert views helped push the stock price higher.

We’ll study what’s driving Trent’s growth, why analysts are feeling bullish, and what this means for investors like us. Let’s break it down in simple terms and see if the rally can last.

Strong Momentum Sparks Market Interest

Trent Ltd, the Tata Group fashion retailer behind Westside and Zudio, has seen its stock surge ~8% from June 18 to June 24. The spark? A wave of bullish brokerage recommendations. We’ve observed brokers raising ratings and prices, fueling investor optimism.

What Brokerages Are Saying

• HSBC began coverage on June 20 with a Buy rating and ₹6,700 target—about 19% upside from ₹5,952 close, citing rapid Zudio expansion and strong execution.
• Macquarie, with an Outperform rating, reiterated a ₹7,200 target (~25% upside). They support Trent’s goal of ~25% annual sales growth and tighter cost controls, while flagging some risks in the grocery (Star) format.
• Morgan Stanley reaffirmed its Overweight stance on June 18, backing Trent’s 10× revenue growth plan through FY 32. They note new stores reach full productivity within 12–24 months.
• Citi kept a Buy call with ₹7,600 target, over 35% upside, leaning on similar growth fundamentals.

Broader Market Reaction

On June 18, shares jumped ~2% to ₹5,740, making it one of the top Nifty gainers. By June 23, the stock rallied again, up ~3%, led by investor enthusiasm from brokerage upgrades, even as markets faced global uncertainty.

Financial Strength Behind the Buzz

Trent’s Q4 performance impressed markets:

• EBITDA jumped 37% YoY to ₹656 crore (vs ₹580 crore expected).
• Margins expanded to 16%, up from previous quarters.
  This strong execution underpins broker confidence and supports the share gains.

Growth Engines: Zudio & Store Expansion

• Zudio, its value-fashion brand, is growing fast, with 200 net store additions planned annually from FY 25–28 per HSBC.
• Overall, Trent aims for ~25% annual growth, fueled by deeper penetration into smaller cities, new categories like beauty and footwear, and rising private-label mix in grocery. It also builds clusters of stores for operational synergy.

Risks & Analyst Warnings

We still need to watch:

• Valuation: Despite falls, recent forward P/E sits between 100–140×.
• Grocery segment: Macquarie cautions on competition in Star hypermarkets and private-label challenges.
• Macro concerns: High inflation or slower discretionary spending could pressure revenue.

Sector Outlook & Peer Comparison

India’s organized retail sector is growing fast, with value fashion leading the way due to strong market support and rising customer demand. Compared to brands like DMart or Page Industries, Trent operates at a lower P/E (~2.4× trailing earnings versus peers), yet shows stronger growth, highlighted by HSBC.

Final Thoughts

We believe Trent’s recent rally reflects more than short-term hype. It’s backed by strong Q4 earnings, aggressive Zudio rollout, and confident analyst upgrades. Still, high valuation and macro risks remain. With a clear growth roadmap, Trent could sustain this momentum, but investors should stay alert on execution and broader market trends.

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Disclaimer:

This content is made for learning only. It is not meant to give financial advice. Always check the facts yourself. Financial decisions need detailed research.