NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has reiterated its 'Buy' rating on Trent Ltd., with an unchanged target price, implying a potential upside of 11% from the current levels.
Outlook
After several quarters of growth deceleration, Trent witnessed growth recovery in Q4 FY26. The brokerage's recent channel checks suggest that sales decline in cannibalized stores has eased, and LFL recovery is underway.
However, Trent's store productivity could still remain under pressure in FY27 as the stores added in tier 2+ markets typically have lower initial productivity and take a longer time to reach maturity levels (vs. metro and tier 1 markets).
Despite relatively weaker growth, Trent continues to maintain strong cost controls to sustain healthy profitability in FY26. Going ahead, Motilal Oswal believes margin expansion would largely be dependent on recovery in LFL growth.
The brokerage continues to like Trent for its strong footprint additions, retail formats with robust store economics, long runway for growth in Star (presence in just 12 cities), and potential scale-up of emerging categories (Beauty, Innerwear and Footwear). However, continued revenue growth acceleration and the resulting earnings upgrades remain key to further re-rating.
The brokerage builds in a CAGR of 21%/19%/17% in consolidated revenue/pre-IND AS Ebitda/adjusted PAT over FY26-28E.
Motilal Oswal reiterates Buy on Trent with an unchanged target price of Rs 3,500, premised on 45x FY28E EV/pre-IND AS Ebitda for the standalone (Westside and Zudio) business, 2.5x EV/sales for Star JV, and ~2x EV/EBITDA for Zara JV.
Click on the attachment to read the full report:
ALSO READ: Tech Mahindra a Bottom-Up Turnaround Story, Says Motilal Oswal; Maintains 'Buy' — Check Target Price
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
