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Published: September 16, 2024
Updated: September 16, 2024

Trent's Stock Doubles in 2024: A Strong Growth Story for Tata Group

Impressive Surge in Trent’s Share Price

Trent, a Tata Group company, has delivered exceptional returns for investors in 2024, with its share price more than doubling. The stock hit a new high of Rs 6,845.40 in recent trading, marking a 124% surge for the year. This impressive rally follows the company’s strong financial performance in the first quarter of FY25, with a 133% year-on-year increase in profit before tax (PBT) to Rs 450 crore.

Consistent Growth in Revenue and Profitability

Trent’s revenue for Q1FY25 increased by 57% year-on-year, reaching Rs 3,992 crore, driven by higher footfalls and strong performance across its brands and categories. The company's earnings before interest, tax, depreciation, and amortization (Ebitda) also grew by 67% year-on-year, with margins expanding to 15.3%. Trent’s focus on driving growth through new initiatives and store expansions has proven successful, with the company achieving a compound annual growth rate (CAGR) of 39% in both revenue and PBT since Q1FY20.

Retail Expansion Fuels Growth

The company operates well-known retail brands like Westside, Zudio, and Trent Hypermarket, with 228 Westside stores and 559 Zudio stores across 178 cities. Trent’s strategy of aggressive store expansion, coupled with a growing online sales channel and new categories, has positioned the company for continued growth. The strong pick-up in new initiatives, particularly in online sales and food offerings, suggests that Trent is well-prepared for future growth.

Positive Outlook for Future Growth

Analysts remain optimistic about Trent's long-term prospects. They expect continued growth driven by the company’s rapid store expansion, innovative product assortments, and increased footfall across its retail brands. Trent’s focus on profitability improvement, particularly at Star Bazaar, and the successful performance of its joint venture with Inditex, are seen as key drivers of future growth. The company’s adoption of a small-format store model for its Star Food segment has also yielded positive results, contributing to its overall resilience.

Strategic Positioning in a Competitive Market

In the broader retail and apparel market, Trent stands out with its steady growth despite challenging market conditions. The company’s ability to absorb raw material cost increases while maintaining strong customer demand is noteworthy. As raw material prices stabilize, Trent is expected to benefit further, supporting its strong revenue growth and improved productivity.

A Strong Investment Case

Trent’s exceptional performance in 2024, driven by robust revenue growth, strategic expansion, and increased profitability, makes it a standout in the retail sector. With a clear focus on long-term growth through store expansion, product diversification, and improving operational efficiencies, Trent remains well-positioned to deliver consistent growth for investors. Analysts continue to recommend the stock as a strong buy, with a target price close to Rs 7,000 per share, reflecting confidence in the company’s future potential.