The stock has extended its gains to 23% in two sessions.
Fashion and lifestyle player Trent reported a 124% year-on-year (YoY) surge in consolidated net profit at Rs 374.36 crore for the quarter ended December 30. The profit stood at Rs 167 crore in the corresponding quarter last fiscal. The company reported a revenue of Rs 3,686 crore, up 50% YoY from Rs 2,460 crore reported by the company in Q3FY23.
Read more: Trent Q3 Results: Cons PAT soars 124% YoY to Rs 374 crore, stock up 15%
Here’s what brokerages recommended:
Morgan Stanley: Equal weight | Target: Rs 3,675
Morgan Stanley has maintained an ‘Equal-weight’ stance on Trent shares and hiked the target price price to Rs Rs 3,675 from Rs 2,307. The company’s Q3 beat Morgan’s estimates with a strong quarter. The fashion vertical reported a strong topline with margins surprising positively.Morgan Stanley has raised its FY 2024-26 EBITDA forecasts by 14- 17% to factor in the better-than-expected Q3 earnings. The risk-reward ratio remains balanced at current levels, it said.
Jefferies: Hold | Target: 3,500
Jefferies has reiterated a ‘Hold’ view on Trent and raised the target price to Rs 3,500 from Rs 3,050. Trent continues to surprise on the positive side, this brokerage said, adding that the overall revenue growth came impressive on a normal base. Ebitda margin came at an eight-quarter high partially led by better gross margins. “Admittedly, we underestimated the ramp-up in Zudio as well as management execution” but “the valuation keeps us on the bay,” Jefferies note said.
Nuvama: Buy | Target: Rs 4,304
Trent delivered another spectacular performance in Q3FY24 with EBITDA/PAT beating Nuvama’s estimate by 21%/34%. Amid a revenue surge, gross margins improved YoY and strong growth drove the EBITDA margin to 19% (+86% YoY), despite aggressive store addition, the brokerage noted.
“The strong performance drives a reset of margin expectations, leading to a 20%/24% increase in EPS for FY24E/25E. Valuing Trent’s standalone business at 80x FY26 PE and ascribing a separate value to subsidiaries/JV yields a revised target of Rs 4,304 from an earlier target of Rs Rs 3,530,” Nuvama said while maintaining a ‘Buy’.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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