RK Damani Stock: This Tata Group retail stock can jump up to 37% on back of aggressive growth strategy, robust performance

Tata Group stock: Brokerage houses are bullish on this Tata Group retail stock in billionaire investor Radhakishan Damani's portfolio. They feel that the scrip can gain up to 36% on the back of strong result and aggressive expansion plan.  

Trent, a Tata Group company, had reported a net consolidated profit of Rs 34.60 crore in the financial year ended March 31, 2022 against a loss of Rs 181.13 crore in the same quarter last year. Its total income stood at Rs 4,673.23 crore during the financial year ended March 2022 as against Rs 2,794.56 crore in the previous year. Trent operates on a strong consolidated net cash position of INR2.5b, despite the aggressive store additions over the last few years. 

Motilal Oswal maintained a buy rating on Trent with a target price of Rs 1430, which is an upside of around 32% on Monday's closing price of Rs 1086.60 per share.  

As per Motilal Oswal, Trent’s successful store performance, healthy store economics, and aggressive growth strategy offer a huge runway for growth over the next three-to-five years.  

Despite the adverse impact of COVID-19 over the last two years, Trent’s standalone revenue/PAT reported an encouraging CAGR of 11%/27% over FY20 to reach INR39b/INR2.5b, respectively, which was by far the best among peers, said the brokerage.  

"Though weak demand in the tier 2-3 cites as validated by our channel checks remains the key near-term risk, we retain 'Buy' On Trent Ltd," it said. 

ICICI Direct, which maintained a buy on the Tata Group retail stock, says Inherent strength of brands (Westside, Zudio, Star, Zara) and accelerated store additions have led Trent to be among the fastest growing companies in its retail coverage universe.  

The brokerage sees a target price of Rs 1470 on Trent in 12 months. This transaltes into an upside of 36%, on yesterday's closing price.  

"Robust performance during challenging times and industry leading performance will continue to warrant premium valuations for Trent. Hence, we maintain our BUY rating on the stock," it said.  

As per the shareholding patterns of the company for the quarter ended March 2022, RK Damani holds as many as 5,421,131 shares of Trent with 1.5% stake in the Tata Group company.  

According to the latest corporate shareholdings filed, the celebrity investor publicly holds 14 stocks as n March 2022. The value of these stocks is pegged at over Rs 158,785.7 crore by stock analysis platform trendlyne.com. Radhakishan Damani, who is also the founder of Avenue Supermarts, has 65.2% in the retail company. He holds 422,159,156 shares of DMart for the quarter ended March 2022. The value of shares of DMart in Damani's portfolio as on June 14 stands at over 1.54 lakh crore, as per trendlyne.com