TRENT - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.5

📊 Core Financials Breakdown

Profitability

ROCE: 28.6% and ROE: 27.2% — exceptional, reflecting Trent’s ability to generate strong returns on capital.

EPS: ₹46.8, with PAT rising from ₹350 Cr. to ₹423 Cr. — a solid 23.5% quarterly growth.

Debt-to-equity: 0.37 — moderate and well-managed, especially for a retail expansion model.

Dividend Yield: 0.10% — minimal, as the company prioritizes reinvestment over payouts.

Institutional Sentiment

FII holding declined (-1.26%) while DII increased (+1.22%) — mixed but still shows domestic confidence.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 110 Extremely high vs. industry average (44.9) — priced for aggressive growth.

P/B Ratio ~31.0 Elevated, typical for high-growth consumer brands.

PEG Ratio 1.40 Reasonable — growth justifies premium valuation.

Intrinsic Value ~₹4,700–₹4,900 (est.) Current price of ₹5,144 is slightly above fair value.

🧠 Business Model & Competitive Edge

Core Operations: Fashion and lifestyle retail through brands like Westside, Zudio, Samoh, and Star Bazaar.

Strengths

Part of Tata Group — strong governance and brand trust.

Rapid store expansion and strong same-store sales growth.

High brand recall and affordability positioning (especially Zudio) targeting India’s middle class.

Challenges

High valuation multiples and recent technical weakness.

RSI at 39.7 — nearing oversold territory.

MACD at -62.6 — bearish momentum.

📈 Entry Zone & Technicals

DMA 50: ₹5,350, DMA 200: ₹5,521 — price is below both, indicating short-term weakness.

RSI: 39.7 — approaching oversold.

MACD: -62.6 — bearish crossover.

📌 Entry Zone: ₹4,800–₹5,000 — ideal for accumulation on dips.

🕰️ Long-Term Holding Guidance

2025 Target: ₹5,580–₹6,150

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2030 Target: ₹7,800–₹9,500

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Outlook: Trent is a long-term compounder with strong brand equity, scalable retail formats, and favorable demographics. Despite short-term volatility, its fundamentals remain robust.

Holding Strategy: Ideal for long-term investors seeking exposure to India’s consumption boom. Accumulate during technical weakness and hold through cycles for compounding returns.

You can explore analyst reports on Trendlyne’s research dashboard or review future price targets on this forecast guide

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