rk damani: This action of RK Damani continues to be in the first place; analysts see up to 36% increase

The Tata Group recently released its annual report, which suggests that the retailer is pursuing aggressive development at all costs.

The shares have been performing exclusively for the past five years, providing nearly 35 percent return, complicated annually. Several brokerage firms are seeing up to 36% more growth on Trent. This is despite some concerns about the short-term slowdown in demand in Level 2-3 citations.

Radhakishan Damani, through its investment division Derive Trading And Resorts, held a 1.52% stake in the retailer as of March 31. Amansa Holdings, led by Akash Prakash, also owned a 2.26% stake in Tata Group

Trent generates 72% of its revenue from Westside and the rest from Zudio. He also manages the Star Bazar grocery store and the Zara fashion brand in India through a joint venture.

“Stable performance during difficult times and industry-leading performance will continue to guarantee first-class ratings for Trent. We maintain our BUY rating on stocks, “ICICIdirect said in a note. This brokerage company has a target of Rs 1,470 per share.

Key factors for the stock increase include in-store additions, a strong Zudio show and a stable liquidity position.

The company added 125 stores in FY 22 in Westside and Zudio, bringing the total to 435 stores in FY 22, exceeding 425 store management guidelines.

In a recent note, Axis Securities expects Trent to continue to grow, given its intention to build 135 stores each in fiscal years 23 and 24 to take advantage of strong demand.

ICICIdirect said it expects 215 new stores between Westside and Zudio for fiscal 23-24.

“The liquidity position remains stable with cash and investments worth 600 rupees and more than one billion, which will allow it to overcome the current situation better than competitors. Zudio continues to be the engine of growth for Trent. We expect its revenue to grow by CAGR of 48 percent in fiscal year 22-24. In the long run, the company aims to increase its CAGR revenue by 25% plus, “said ICICIdirect.

forecasts 37% revenue growth in fiscal year 22-24, which it believes guarantees a premium valuation of shares.

Among the key highlights of the annual report, analysts note that Zudio remains the fastest growing fashion brand in India with revenues in excess of Rs 1,000 over fiscal year 22. With the achievement of the brand scale, the EBIT margin increased to 6% in fiscal year 22 from nearly 1% in fiscal year 21.

In the case of Westside, sales exceeded pre-Covid levels from H2FY22 onwards with positive sales growth in the same store (SSSG). The gross income for the 22nd financial year for this format is 2,900 kroner.

Analysts said Zara India reported strong growth of 61% on an annual basis, which is 115% of the levels before Covid, despite the muted replenishment in stores. However, losses for Star Bazar increased on an annual basis, mainly due to higher discounts and tighter prices.

Motilal Oswal said Zudio’s revenue more than doubled in fiscal year 22 compared to fiscal year 20, despite the adverse effects of the pandemic. The same should increase 3 times over the next two years to 3,300 rupees.

“Our channel checks show that the six-month Zudio stores collect annual revenue of Rs 10 crore, ie. Rs 14-15k per square foot, almost 20-30 percent more than stores of similar size. We understand “The company is aggressively fighting to add 200 stores in the 23rd financial year. In addition, Utsa, which serves women’s ethnic clothing, already has six stores and remains another engine for the company’s growth, “Motilal said.

This broker has assigned 31 times EV / Ebitda rating for 24 FY to stand-alone business (Westside and Zudio), 1 time EV / Star Bazaar sales rating and 15 times EV / Ebitda rating to Zara to achieve a revised target of Rs 1430 from 1180 rupees earlier.

Phillip Capital sees shares of 1379 rupees. Axis Securities has a target of Rs 1180 per counter.

The shares traded at Rs 1063.80 per share on Friday and the targets suggest a 9-36% increase.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. They do not represent the views of the Economic Times)

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