⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
TRENT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | TRENT | Market Cap | 1,32,558 Cr. | Current Price | 3,729 ₹ | High / Low | 6,261 ₹ |
| Stock P/E | 78.3 | Book Value | 186 ₹ | Dividend Yield | 0.13 % | ROCE | 28.6 % |
| ROE | 27.2 % | Face Value | 1.00 ₹ | DMA 50 | 4,110 ₹ | DMA 200 | 4,776 ₹ |
| Chg in FII Hold | -1.19 % | Chg in DII Hold | 1.53 % | PAT Qtr | 451 Cr. | PAT Prev Qtr | 423 Cr. |
| RSI | 34.7 | MACD | -110 | Volume | 6,71,475 | Avg Vol 1Wk | 8,46,818 |
| Low price | 3,693 ₹ | High price | 6,261 ₹ | PEG Ratio | 1.00 | Debt to equity | 0.35 |
| 52w Index | 1.40 % | Qtr Profit Var | 6.45 % | EPS | 47.6 ₹ | Industry PE | 43.7 |
📊 Core Financials
- Revenue Growth: Quarterly PAT improved from 423 Cr. to 451 Cr., showing steady growth.
- Profit Margins: EPS at 47.6 ₹ reflects strong profitability.
- Debt Ratios: Debt-to-equity at 0.35, moderate leverage manageable for expansion.
- Cash Flows: Likely positive given consistent earnings and dividend payouts.
- Return Metrics: ROCE at 28.6% and ROE at 27.2% highlight excellent capital efficiency.
💹 Valuation Indicators
- P/E Ratio: 78.3, significantly higher than industry average (43.7), suggesting premium valuation.
- P/B Ratio: ~20.0 (Current Price / Book Value), very expensive relative to book value.
- PEG Ratio: 1.00, indicates valuation is aligned with growth expectations.
- Intrinsic Value: Current price (3,729 ₹) trades below DMA 50 (4,110 ₹) and DMA 200 (4,776 ₹), signaling undervaluation in technical terms despite premium fundamentals.
🏢 Business Model & Competitive Advantage
- TRENT operates in retail (Westside, Zudio, Star Bazaar), benefiting from strong brand presence and consumer demand.
- Competitive advantage lies in diversified retail formats, brand equity, and expansion strategy.
- Strong return ratios and consistent profitability provide resilience in consumer discretionary markets.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near 3,600–3,700 ₹, close to current levels and below DMA averages.
- Long-Term Holding: Suitable for investors seeking exposure to retail growth. Strong fundamentals support holding, though valuation premium should be monitored.
Positive
- Quarterly PAT improved from 423 Cr. to 451 Cr.
- ROCE (28.6%) and ROE (27.2%) highlight excellent capital efficiency.
- DII holdings increased (+1.53%), reflecting domestic institutional confidence.
Limitation
- High P/E ratio compared to industry average.
- P/B ratio at ~20.0 suggests expensive valuation.
- Dividend yield at 0.13% offers negligible shareholder return.
Company Negative News
- FII holdings decreased (-1.19%), showing reduced foreign investor confidence.
- Stock trading below DMA 50 and DMA 200, reflecting bearish sentiment.
Company Positive News
- Quarterly PAT growth of 6.45% indicates steady operational performance.
- Strong brand-driven expansion continues to support earnings momentum.
Industry
- Retail industry trades at P/E of 43.7, much lower than TRENT’s valuation.
- Sector benefits from rising consumer demand, urbanization, and premiumization trends.
Conclusion
- TRENT is fundamentally strong with excellent return ratios, profitability, and brand-led growth.
- Valuation is stretched compared to industry, limiting near-term upside.
- Best suited for long-term investors seeking retail exposure, with entry near 3,600–3,700 ₹ offering better value.
I can also prepare a retail sector peer comparison HTML table (TRENT vs Avenue Supermarts, Aditya Birla Fashion, Shoppers Stop) to highlight relative valuation and efficiency metrics if you’d like.