Morgan Stanley maintained a “overweight” call to Tata Group’s diversified retail player Trent, with a target price of Rs 6,359. Starting from the last end, the recommended target price means a potential upside of 11%. The broker reiterated its previous appeal for the stock as it is optimistic about the company’s long-term growth.
In the positive outlook, Trent’s share price rose more than 1% in trading on Thursday to Rs 5,800 per share at the day’s high, but saw a slight loss as of the last charge. At around 10:56 am, the Tata Group’s shares cut by 0.49 per cent or Rs 27.9 to a price of Rs 5,705 per share.
The brokers listed management’s ambitious goal to increase revenue tenfold from FY23 to FY32, but foreign brokers warned that the growth trajectory could be volatile.
It added that management demonstrated the flavor of business models and strategies that would allow the retail profession to realize its 10x revenue aspiration.
The company is working to increase store density in the underage market and position itself as a multi-category retailer. Furthermore, it remains a micro-market strategy designed to increase market share and brand relevance.
The company’s financial position has improved at record levels in terms of improved profitability and asset churn.
Macquarie in Trent
Meanwhile, another brokerage firm, Trent, reiterated its “outperform” rating with a target of Rs 7,200, which means a possible return of up to 26%.
Trent analyst meets takeaway
Nevertheless, the company did not provide any specific guidance at the analyst meeting, and nonetheless, its management focused on gaining market share rather than similar (LFL) growth. LFL growth is an indicator that helps compare sales performance of existing stores over a specific period.
Retail professionals believe that growth is good and the target is a CAGR of 25%.
Jefferies, who supports the strategy, said that increasing market share is more important than increasing the number of stores compared to LFL.
It also noted that retail entities will only try in those segments of repeated purchases.
In addition, the company focuses on a brand strategy it owns and will not engage in third-party distribution.
At the analysts’ meeting, retail participants noted that Zudio will be the growth driver, and the Samoh and Zudio Beauty categories are not in Los
