Morgan Stanley raises target price for this multibagger Tata Group stock; sees its well placed to navigate next growth phase

Global brokerage, while maintaining its equal weight call on Tata Group’s retail major Trent, has raised the target price to Rs 4,812 from the earlier Rs 3,675. The new target price implies a potential upside of over 4 per cent from the stock’s last trade price of Rs 4,615.95 per share on the BSE.

The stock in the past one year has surged a massive 202 per cent, while its 1-month return is at over 7 per cent.

The brokerage believes the company is in the early rounds of its growth and the potential remains immense. Further, the company housing Westside, Zudio and other similar formats is  well placed to navigate this next phase of growth by leveraging the platform and growth engines. 

The return ratios at the company also improved to record levels aided by better profitability and improving asset turnover ratio.

Earlier brokerage firm Motilal Oswal continued with its ‘buy’ rating on the stock with a revised target of Rs 4,870, given the company’s strong growth opportunity going forward. In the backdrop of strong revenue growth, aggressive store additions, margin tailwinds from moderating raw material costs, and operating leverage, the brokerages estimated a CAGR of 32%/38% in revenue/PAT over FY24-26. The continued momentum in Star and improving store metrics offer further upside potential. 

Star is the company’s modern retailer for fresh food and groceries. The company offers an array of  daily essentials, fresh produce, poultry and a host of exclusive TATA brands at great value. 

Trent’s Q4FY24 results

TRENT reported strong standalone revenue growth of 53 per cent  in 4QFY24, led by 10 per cent like-for-like ( LFL) and 37% YoY store additions. Robust revenue growth, along with GM improvement and operating leverage, resulted in 2.3x/2.4x YoY growth in EBITDA/PAT.