Trent becomes the fifth company from Tata stable to cross ₹1-lakh crore Mcap

Trent, the retail arm of the Tata Group, on Friday joined the elite club of one lakh crore market capitalisation as the stock has more than doubled in the first eleven months of 2023. The company also became the fifth company from the group to achieve this milestone after Tata Consultancy Services, Titan, Tata Motors and Tata Steel.

Shares of Trent have surged nearly 110% so far in 2023 to clock one of its best performance post 2009. The stellar rally also bolstered its weightage among the group companies. The company’s share in the in the aggregate group market capitalisation has more than doubled to nearly 4% from 1.5% in May 2020, a share higher than that of Tata Elxsi, Tata Communications, Voltas and Tata Chemicals.

Including Trent, there are only 62 companies in the country which boast of a minimum one lakh crore market valuation. Trent shares added another 1.4% in Friday’s trades to hit a record high of ₹2,827.80 on the NSE. The stock has surged 6.4% during the week against 2.4% gains yielded by the benchmark Nifty50 during the same period.

Axis Securities, which has a buy rating on the stock expects the strong sales growth of Trent to continue in the coming quarters as the company focuses on rapid store expansion and continued assortment renewal, which will result in higher overall footfall. “We remain positive on the company and estimate it to post a revenue growth of 26% with an EBITDA growth of 31% CAGR on a standalone business over FY23-26E.” wrote Axis Securities in a note to investors.

The company reported a robust set of numbers for the second quarter of FY24 which were significantly above the street estimates. While the net profit increased by 56% to ₹290 crore, the top-line grew at a higher rate of 59% year on year (y-o-y) to ₹2,891 core. The growth was largely led by increased footfalls, strong growth across categories and channels, and continued store expansion.