This Tata group stock joins Nifty50 index after delivering multibagger returns: Can you still buy it?

Tata Group's Trent stock has recently taken a coveted spot in the bluechip Nifty50 index on September 1. The stock has risen significantly and has been a wealth creator for its shareholders. In Tuesday's trade (Septemeber 3), the stock traded lower by 1.47 per cent at Rs 7,042.9 per share on the BSE.

The company for Q1FY25 posted consolidated revenue at Rs 4,354 crore, up 55 per cent on year, while the profit before tax soared to Rs 501 crore, a sharp jump of 136 per cent from the same period last year.

As reflected in the company's investor presentation has taken a steep CAGR leap of 66 per cent in m-cap and it now stands at over Rs 2.5 lakh crore.

Brokerages maintained a buy view on the stock with a buy rating after the company's Q1FY25 results. Axis Direct suggested a target of Rs 7000 for the stock.

The brokerage noted that the company's strong performance over the past several quarters,despite weak consumer demand, is commendable. We expect strong sales growth to continue in the coming quarters, driven by Trent's focus on rapid store expansion and ongoing assortment renewal, which should result in increased overall footfall.

Additionally, the improvement in the earnings profile across all formats, the reduction in losses at Star Bazaar, and the enhanced traction at the Inditex JV are positive indicators for the company. In recent years, Trent has adopted a small-format store model for Star Food. This approach, coupled with sharp pricing and a focus on fresh produce and private labels, has yielded positive results. The resilience and commercial viability of this model are evident in its performance, added the brokerage.

Should you add Trent after its entry in Nifty index?

Trent has been a wealth creator for its investors, with the stock gaining a whopping 134% YTD. The company has witnessed a spectacular growth in sales, with sales growth averaging ~70% over the past 3 years, while at the same time, profitability of the company too has grown multifold, noted  Aamar Deo Singh, Sr. Vice President of Research, Angel One. 

Technicals

Riyank Arora Technical Analyst at Mehta Equities added Trent's recent inclusion in the Nifty index has driven significant gains, yet the stock's positive trend suggests potential for further upside. I

mmediate support is at Rs 6,950, with major support at Rs 6,750, while resistance lies at Rs 7,325 and Rs 7,500. The strong bullish momentum indicated by the RSI supports a 'buy on dips' strategy. However, given the stock's prior gains, cautious entry with a strict stop loss near support levels is advisable, added Arora