Inventory Test: This Tata Group firm is the one Nifty 50 inventory to offer multibagger returns in 2024; is it nonetheless a purchase?

Multibagger inventory: Tata Group’s retail arm, Trent, has emerged as the one inventory from the Nifty 50 pack that has delivered multibagger returns in 2024. The inventory has skyrocketed by 125 per cent in comparison with a modest 13.5 per cent rise within the benchmark Nifty 50 index. Over the past 12 months, Trent has recorded a formidable rally of 139 per cent, underlining its sturdy progress trajectory.

Efficiency Highlights

Trent has delivered optimistic returns in 10 out of the 12 months of 2024, with a 1.5 per cent acquire in December to this point, following a two-month dropping streak. The inventory declined 4.7 per cent in November and 6 per cent in October. Earlier than this, Trent sustained a optimistic run for 9 consecutive months from January to September.

Presently buying and selling at ₹6,876.55, the inventory is about 18 per cent beneath its all-time excessive of ₹8,345.85, achieved in October 2024. It has, nevertheless, gained over 141 per cent from its 52-week low of ₹2,850, recorded in December 2023.

With these exceptional positive aspects, buyers are considering whether or not the rally has additional room to develop or if Trent’s efficiency has peaked. This is what analysts should say:

Technical Evaluation

The outlook for the inventory seems bullish on the technical charts, particularly following the current corrective section. Analysts count on the inventory to commerce above ₹7,200 ranges if it breaks above key resistance ranges.

“Trent has proven a powerful restoration from its 100-day Exponential Transferring Common (DEMA) after a 25 per cent dip from its peak. Presently buying and selling close to its short-term EMAs, the technical outlook seems barely bullish. Traditionally, the inventory has discovered help on the 50 and 89 DEMA ranges,” mentioned analysts at Angel One.

The 100 DEMA round ₹6,660 is anticipated to behave as a cushion, because the inventory has gained 10 per cent from its current swing low, the brokerage mentioned, though it cautioned that the potential for profit-booking can’t be ignored, with the ₹7,150-7,200 vary appearing as a stiff resistance on the upside. A decisive breakthrough above this vary may gasoline continued momentum, it added.

Commenting on key ranges for Trent inventory, Ajit Mishra, SVP Analysis at Religare Broking, said {that a} drop beneath ₹6,650 may result in additional draw back in direction of ₹6,200, whereas a powerful shut above ₹7,050 may reignite momentum, with the potential to succeed in ₹7,250.

Trent shares have been present process a correction after a meteoric rise over the past two years. From ₹1,150 in January 2023 to a report excessive of ₹8,322 in October 2024, the inventory has witnessed a near-vertical climb. It’s presently in an intermediate corrective section whereas sustaining help at its 100 DEMA, Mishra mentioned.

Basic Outlook

Worldwide brokerage Morgan Stanley reiterated its ‘obese’ stance on Trent following the launch of its new standalone retailer format, Zudio Magnificence, marking its entry into the mass-priced magnificence section.

Morgan Stanley set a goal value of ₹8,032, projecting an eight per cent upside. The brokerage famous that magnificence and private care (BPC) gross sales have been already a big contributor to Westside and Zudio shops, and the section has scaled up over time as prospects leaned in direction of extra indulgent spending.

Earlier in September, Citi had initiated protection on Trent with a ‘purchase’ score, assigning a value goal of ₹9,250. The inventory was additionally included in Citi’s Pan-Asia high-conviction focus checklist.

Citi highlighted Trent’s means to leverage its provide chain and insights from its Westside and Zudio codecs whereas efficiently turning round its Star Bazaar enterprise. The brokerage lauded Trent’s transformation right into a multi-format participant, driving a 36 per cent income CAGR from FY19 to FY24.

As a diversified participant throughout style, life-style, grocery, and private care, Trent is anticipated to report industry-leading CAGRs for income, EBITDA, and PAT at 41 per cent, 44 per cent, and 56 per cent, respectively, for FY24–27, Citi mentioned.

Earnings Efficiency

Trent, the style and life-style retailer, reported consolidated income from operations of ₹4,156.67 crore for Q2 of FY25, marking a 39.3 per cent improve from ₹2,982.42 crore in the identical interval of the earlier 12 months. The corporate’s consolidated internet revenue for the September quarter rose by 46.9 per cent year-on-year to ₹355.06 crore, in comparison with ₹228.06 crore within the corresponding interval final 12 months.

Disclaimer: The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise buyers to verify with licensed specialists earlier than taking any funding choices.