27 Mar , 2025 By : Debdeep Gupta
Global broking house Macquarie initiated coverage on Tata Group player Trent Ltd. with an 'outperform' tag, believing that the fashion retailer's growth has long legs.
The brokerage issued a share price target of Rs 7,000 per share, which indicates an upside of around 32 percent from the previous session's closing price. At 9.18 am, shares of Trent were trading at Rs 5,379.25, higher by 1 percent on the NSE.
The brokerage noted that compared to peers, Trent leads the pack on key metrics, such as growth, return profile, and inventory turns.
This trend is likely to sustain, as Trent's integrated back-end allowed faster fashion-forward drops. The addition of new stores, especially through the franchisee route, aids Trent's return profile.
Trent has Asia's best retailing metrics, and the firm is a play on India's rising discretionary expenditure in the fashion segment.
On March 26, Trent announced that its brand Westside has opened three more stores in multiple cities, taking its total store count to 244. In three separate exchange filings, Trent announced the inauguration of three new Westside stores in Jodhpur, Jaipur, and Chennai.
Further, on March 10, Kotak Institutional Equities shared a contrasting view. The brokerage maintained a ‘Reduce’ rating and set a price target of Rs 5,150, dampening investor sentiment.
Kotak flagged concerns over Trent’s revenue throughput, citing the impact of densely located new stores of Westside and Zudio. The brokerage revised its estimates downward, trimming FY26-27 earnings per share by 1-5 percent. The stock has been volatile amid reports of Reliance Retail relaunching Shein in India, sparking concerns over competition for Zudio and Aditya Birla Fashion.
However, last month, Goldman Sachs said the recent weakness is a buying opportunity, maintaining a ‘Buy’ rating with an Rs 8,300 price target. The brokerage expects Zudio to gain market share, downplaying competitive risks.
0 Comment