Tata Group stock engaged in the retailing of apparel, footwear, accessories, toys, games, food, grocery & non-food products, and many more jumped upto 9 percent in the day’s trade following the brokerage call and foray into the beauty segment.
Price Action
With a market capitalization of Rs. 2,82,430 Crores, the shares of Trent Limited were trading at Rs. 7,942 per equity share, up 7 percent from its previous day’s close price of Rs. 7,449.45.
What Happened
As per sources Trent Limited has forayed into the mass-priced beauty segment with the launch of a new standalone store format, Zudio Beauty. This launch places Zudio Beauty in direct competition with established players such as Hindustan Unilever’s Elle18, Sugar Cosmetics, Health & Glow, and Colorbar.
Also, Kotak Institutional Equities highlighted that Trent has launched a lab-grown diamond jewelry brand ‘Pome’ in Westside stores, as per sources. It expects the rollout of Pome EBOs with a comprehensive product portfolio and an accelerated scale-up in the next 1-2 years.
Brokerage Target
Global brokerage firm Morgan Stanley has maintained an ‘Overweight’ rating on Trent, with a price target of Rs. 8,032 per share. The BPC sales contribution was already quite material in Westside and Zudio stores. Zudio’s BPC business had built scale over time, as customers have become more indulgent and impulsive, said the brokerage.
About the Company
Trent Limited is part of the Tata Group, It operates a portfolio of retail concepts by engaging in the retailing of apparel, footwear, accessories, toys, games, food, grocery & non-food products through various of its retail formats/ concepts.
As of Q1FY25, its store portfolio included 228 Westside, 559 Zudio, and 36 stores across other lifestyle concepts. During the quarter, it added 6 Westside and 16 Zudio stores across 12 cities.
Financials and Ratios
Its Revenue from operations grew by 56 percent from Rs. 2,628 Crores in Q1FY24 to Rs. 4,104 Crores in Q1FY25, accompanied by profits of Rs. 167 Crores to Rs. 391 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 27.2 percent, and a return on capital employed (ROCE) of 23.8 percent. It has reported a debt-to-equity ratio of 0.43.
Written by: Bharath K.S
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