Trent Ltd. share price target

We met with the CEO and CFO of Trent Limited (TRENT), Mr. P. Venkatesalu and Mr. Neeraj Basur, who stated that the opportunity in the value retail space is still
substantial, with the company’s market share at 2%/8% of total/organized retail value market size.

Back-to-back 10% SSSG since last three quarters is impressive (significant outperformance vs peers). Retail expansion has been in line with expectations (added 203 Zudio stores and 30 Westside in FY24).

We remain positive on the company and expect Revenue/EBITDA growth of 32%/39% CAGR on a standalone business over FY23-26E. We maintain our BUY rating on the stock and value the company on a SOTP basis with a revised TP of Rs 4,800/ share. Our TP implies an upside of 11% from the CMP.

Trent posted yet another stellar quarter in Q4FY2024 with revenues growing by 53% y-o-y to Rs. 3,187 crore, EBITDA margin rising sharply by 477 bps y-o-y to 15% and adjusted PAT growing by 2.75x y-o-y to Rs. 289 crore.

TRENT reported strong standalone revenue growth of 53% (in line) in
4QFY24, led by 10% LFL and 37% YoY store additions. Robust revenue
growth, along with GM improvement and operating leverage, resulted in
2.3x/2.4x YoY growth in EBITDA/PAT (11%/31% beat).

Trent posted yet another stellar quarter in Q4FY2024 with revenues growing by 53% y-o-y to Rs. 3,187
crore, EBITDA margin rising sharply by 477 bps y-o-y to 15% and adjusted PAT growing by 2.75x y-o-y to Rs. 289 crore.

Recommendation With a 12% upside potential from the CMP, we maintain our BUY rating on the stock.