Agencies report that several brokerages have slashed Trent’s target price to as low as Rs 4,300, citing a decline in growth and muted consumer sentiment. Prominent firms like Jefferies, Motilal Oswal, Elara Capital, and HDFC Securities have reevaluated their prospects for Trent after the company’s recent Q2 results, expressing concerns over slowing growth momentum, low same-store sales growth, and subdued consumer demand.
Revised Target Prices: Overview
– Jefferies: Target Price – Rs 5,000
– Maintains a Hold rating.
– Identifies deceleration in revenue growth to 17%, marking a multi-quarter low.
– Notes stability in operating EBITDA margins, while indicating that gross margins have slightly dropped.
– Motilal Oswal: Target Price – Rs 6,000
– Continues with a Buy rating despite a significant slowdown in growth.
– Acknowledges strong cost controls leading to healthy EBITDA growth.
– Highlights robust strategies for expansion and confidence in Trent’s long-term performance.
– HDFC Securities: Target Price – Rs 4,300
– Keeps a Reduce rating.
– Points to visible growth fatigue and a revenue increase of just 17.1% YoY.
– Flags a sharp decline in same-store sales growth (SSSG) for the first time in years.
– Elara Capital: Target Price – Rs 5,500 (down from Rs 7,020)
– Downgrades from Buy to Accumulate.
– Notes Q2 revenue was below expectations but margin improvement stemmed from reduced costs.
– Considers the competitive landscape as a challenge impacting growth.
Conclusion: Industry Outlook on Trent’s Growth
Despite Trent’s impressive 11% YoY profit increase to Rs 377 crore and a 16% YoY revenue jump to Rs 4,818 crore, there is a recurring theme of caution among analysts. Concerns regarding slowed growth and consumer sentiment’s impact have led to significant adjustments in target prices. While some brokerages maintain a cautious optimism regarding the company’s long-term strategies, the outlook remains wary as these trends continue to unfold. Stakeholders should keep a close eye on these developments before making decisions.