HDFC Securities has issued a sell call on Trent, with a target price of ₹4,160, despite the company’s recent financial performance. Trent is a large-cap retail company with a market capitalization of ₹219,927.65 crore and a market price of ₹6,176.7.
In its recent quarterly results, Trent reported a consolidated total income of ₹4,204.65 crore, a 1.31% increase from the previous quarter and a 37.30% increase from the same quarter last year. The company’s net profit after tax for the quarter was ₹329.29 crore.
The company’s key products and revenue segments include readymade garments, other operating revenue, and rent. HDFC Securities expects Trent’s revenue to grow by 40.1% year-on-year (YoY) to ₹46.4 billion, with a 10.2% YoY growth in Westside and 63% YoY growth in Zudio.
However, HDFC Securities is maintaining a sell rating on Trent, citing concerns over the company’s gross margin and EBITDA margin. The brokerage estimates a gross margin of 43% for Q3FY25, down from 46% in Q3FY24, and an EBITDA margin of 14.3%, down from 18.8% in Q3FY24.
As of December 31, 2024, promoters held a 37.01% stake in the company, while foreign institutional investors (FII) owned 21.68%, and domestic institutional investors (DII) owned 15.25%. Investors are advised to consult their financial advisor and seek independent advice before making any investment decisions.