Up over 200% in 1 year! Here's why Motilal Oswal sees further upside in this multibagger Tata-group stock

Shares of Trent are back in focus after the company's stellar March quarter results.  The company reported a multifold jump in consolidated net profit at Rs 712 crore for the fourth quarter. The profit stood at Rs 45 crore in the corresponding quarter last year.

It also posted a 51 per cent year-on-year (YoY) jump in revenue from operations to Rs 3,297.70 crore against Rs 2,182.75 crore in the same quarter last financial year. The board of the company also recommended a dividend of 320%, Rs 3.20 per equity share of Re 1 each, subject to the approval of shareholders.

Brokerage firm Motilal Oswal has reiterated its 'BUY' rating with a revised target price of Rs 4,870, given Trent’s strong growth opportunity going forward. Trent’s strong performance with 10% like-for-like (LFL) growth and robust footprint additions is an outlier in our retail coverage universe, which is facing a challenging demand environment, it said.

"Unlike peers that passed on the sharp raw material price increases last fiscal, Trent absorbed the impact, seeing strong customer reception and is now reaping the benefits as raw material prices turn benign," it noted.

According to Motilal, Trent’s industry-leading revenue growth, driven by healthy SSSG and productivity, robust footprint additions, and healthy scale-up in Zudio, offers a huge runway for growth over the next three to five years.

It added that the company’s grocery segment, Star, with merely 66 stores and FY24 revenue of Rs 27.5 billion, is seeing strong LFL growth. This presents a huge opportunity for growth for Trent. Its brand strategy and curated range are witnessing strong customer responses

Trent's portfolio includes 232 Westside, 545 Zudio and 34 stores across other lifestyle concepts. It added 18/193/10 stores for Westside/Zudio/other lifestyle concepts in FY24.