Trent share price surges to record high after Citi initiates coverage

Trent share price: Shares of Tata Group company Trent Ltd. rose as much as 4.32 per cent on the BSE to hit record high of Rs 7,939 after international brokerage firm Citi initiated coverage on the stock with a buy rating. Citi has initiated coverage on the Trent for target price of Rs 9,250 indicating an upside of nearly 22 per cent from its previous closing price of Rs 7,609.60.

In a report Citi said that Trent's transformation from a single-format to a multi-format and multi-category player led to a higher revenue CAGR versus India’s leading consumer discretionary and retail peers.

"Trent has a higher revenue CAGR than India’s leading listed consumer discretionary and retail companies, led by store expansion under Zudio along with rising rev per sq ft at Westside and Zudio," Citi said in a report.

Citi added that Trent is one of the leading and fastest growing fashion and lifestyle retailers in India. As of first quarter of current fiscal, Trent operated 823 fashion stores – 228 Westside, 559 Zudio and 36 Other lifestyle/fashion formats (Utsa, Misbu, Samoh) and 72 Star stores (grocery supermarket under a 50:50 JV between Trent and Tesco Plc UK). Trent also has a 35% financial stake in company operating 23 Zara and 49% financial stake in a company operating 3 Massimo Dutti stores in India.

“While incumbents have focused on ‘Buying’ businesses/growth, Trent’s strategy has been to ‘Build’ businesses – either organically or through global partnership/tie ups,” Citi said.

Citi’s buy rating also highlights the paradigm shift India’s retail sector is undergoing and Citi said, “Value retailing in India is undergoing a paradigm shift led by consumers being more discerning and aspirational and hence the need for better shopping experience (shift from unorganized to organized); fashionable product (fast fashion); better value proposition and increasing wardrobe size.”

Citi added that while there are multiple players in value fashion retailing such as Max Fashion and Vmart the industry dynamics has changed meaningfully since FY19 when Zudio started to scale (from 56 stores in FY19 to 559 stores as on 1QFY25)

Trent shares have handsomely rewarded investors in last one year as it has surged a whopping four times.