Buy Trent; target of Rs 500: Motilal Oswal
Motilal Oswal ‘s research report on Trent
Trent (TRENT) appears well positioned to capitalize on India’s high-growth retail apparel market, given its ability to execute well in a fast-changing operating environment. The company is embarking on an accelerated growth strategy, particularly at Westside (with its thrust on women-centric fashion and private labels) and Zudio (margin-accretive apparel line-up), both of which hold a strong brand promise. In this note, we provide the rationale behind our positive stance on the company.
We raise our SOTP-based TP to INR500 (v/s INR440 earlier), valuing Westside and Zara at 26x EV/EBITDA and Star at 1x EV/sales on Sep’21E. Westside and Zara are valued at a 30% premium to industry average. The implied TP is at par with the three-year average. Maintain Buy.
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