
Elara Capital has initiated coverage on Trent Limited, a subsidiary of the Tata Group and a leader in India’s retail industry. The brokerage has set a target price of ₹8,500, representing a potential upside of 38%. Trent is expected to outperform its peers, driven by its robust growth strategies and market dominance.
Key Highlights:
- Zudio’s Market Leadership: Zudio, a brand under Trent, is projected to maintain its leadership in the fast fashion segment, supported by:
- A successful private label strategy.
- Differentiated fashion offerings driving robust traction.
- Prudent focus on product quality at reasonable price points and organic growth.
- Fast Fashion Growth: The fast fashion segment, led by Zudio, is set to expand at a 31% CAGR through FY27E. By FY27E, the segment’s share in the apparel industry is expected to rise to 14% from 10% in FY24.
- Strong Financial Growth: Elara expects Trent to deliver impressive consolidated financial growth during FY24-28E:
- Revenue CAGR: 27%
- EBITDA CAGR: 29%
- Adjusted PAT CAGR: 38% This growth rate surpasses the estimated 16% CAGR for the overall apparel industry.
- Valuation:
- Standalone business valued at 57x EV/EBITDA (Sep ’27E).
- Star Bazaar operations valued at 4x EV/sales.
- Zara and Massimo Dutti partnerships valued at 30x EV/EBITDA.
- Resilience Amid Competition: Despite intensifying competition and the rise of quick commerce, Trent’s unique store formats and strategic positioning provide it with a significant edge.
Outlook:
Trent’s robust strategies, combined with its premium positioning, are expected to propel its growth ahead of the industry average. Both Zudio and Westside are anticipated to continue delivering strong performances, consolidating Trent’s position as a leader in the Indian retail landscape.
Disclaimer: This article is based on analysis and projections provided by Elara Capital. The information is for informational purposes only and should not be considered financial or investment advice. Always consult a professional before making investment decisions.