Citi initiates 'buy' on this Tata group stock; sees potential upside of nearly 22%

Brokerage firm Citi has initiated its coverage on the Tata group retail giant Trent with a buy call and a target price of Rs 9,250. The set target implies potential gains of nearly 22 per cent.

In the previous day's trade, Trent shares ended lower by a tad at Rs 7,614 per share on the BSE.

As per the brokerage, the company is on the fast fashion growth trend. The company's transformation from Westside to Zudio, Star, Samoh etc and multi-category player led to a higher revenue CAGR. Citi models Trent to register industry-leading revenue/EBITDA/PAT CAGR of 41/44/56 per cent in FY24- 27E.

The brokerage also highlighted that it is turning around Star and can meaningfully scale up other pilot projects. We include Trent in our Pan-Asia high-conviction focus list, added Citi.

Nonetheless, the key risks that remain are a slowdown in Zudio expansion, competition, limited success in new formats.

Trent stock price gains

The stock of Trent in the last one year has yielded multibagger return for its investors to the tune of 253 per cent.

Disclaimer: The recommendation on the stock is the sole recommendation of the brokerage and Zeebiz.com has no call on the same.