Trent rallies 7%, hits new high; stock zooms 41% in 15 trading days

Trent share price hit a new high of Rs 7,325 in the intraday trade, zooming 261% in the past 10 months

Trent share price today hit a new high of Rs 7,325, surging 7 per cent on the National Stock Exchange (NSE), in Wednesday's intraday trade.

This comes after index provider NSE Indices, on Friday, announced that Trent and Bharat Electronics will replace Divi's Laboratories and LTI Mindtree in the benchmark Nifty 50 index. The changes, a part of the semi-annual review, will become effective from September 30.

Since August 6, i.e. in the last 15 trading sessions, the stock price of the Tata Group company has rallied 41 per cent on the back of a healthy set of numbers for the June 2024 quarter (Q1FY25). Further, in the past 10 months, the market price of Trent has zoomed 261 per cent from a level of Rs 2,031.15.

 

Trent's financial growth was driven by increased footfalls and strong performance across brands, concepts, categories, and channels, despite subdued market sentiments and heightened competitive intensity.

The company’s earnings before interest, tax, depreciation and amortisation (Ebitda) grew by 67 per cent year-on-year (Y-o-Y), with Ebitda margin expanding by 88 bps Y-o-Y to 15.3 per cent, driven by gross margin expansion.

Trent is part of the Tata Group and operates a portfolio of retail concepts. The primary customer propositions of Trent include Westside, Zudio, and Trent Hypermarket, which operates in the competitive food, grocery and daily needs segment under the 'Star' banner. Trent now operates 228 Westside stores and 559 Zudio stores across 178 cities.

On Tuesday, August 27, Siddhartha Yog purchased 678,200 equity shares of Trent at a price of Rs 6,925 on the NSE via block deal. The seller in the deal was Donona Holdings.

Earlier, Siddhartha Yog had acquired 246,100 equity shares of Trent at a price of Rs 6,790 (August 21), and 24,500 equity shares at Rs 5,220 (August 7) from the Donona Holdings on the NSE via block deal, the data shows.

As on June 30, 2024, Dodona Holdings held 16.09 million or 4.53 per cent stake in Trent, shareholding pattern data shows. CLICK HERE FOR DETAILS

Meanwhile, analysts at Axis Securities believe Trent's outstanding performance over the past several quarters, despite weak consumer demand, is commendable.

The brokerage firm expects strong sales growth to continue in the coming quarters, driven by Trent's focus on rapid store expansion and ongoing assortment renewal, which should result in increased overall footfall.

Additionally, the improvement in the earnings profile across all formats, the reduction in losses at Star Bazaar, and the enhanced traction at the Inditex JV are positive indicators for the company. However, the stock is currently trading above target price of Rs 7,000 per share.