Tata Group stock! BofA turns bullish on Trent, initiates coverage with Buy, pegs 17% upside

BofA Securities has initiated coverage on Tata Group's retail company Trent, assigning it a Buy rating and setting a price target of Rs 3,075 per share. This reflects the firm's optimism regarding Trent's differentiated retail platform, robust growth prospects, and integrated technology and supply-chain capabilities. Trent's share price closed at Rs 2,622.50 on the NSE on Wednesday, marking a 0.47% decrease from the previous close of Rs 2,635.

Analysts Aditya Mathur and Pritesh Sonar highlighted Trent's diverse retail portfolio encompassing apparel, fashion, beauty, food, and grocery, as well as its emerging consumer lifestyle concepts. The brokerage emphasized Trent's unique selling points, such as its direct-to-consumer model, end-to-end control over brands, products, sourcing, pricing, inventory, and stores, supported by a robust technology and supply-chain backbone.

Despite the fashion retail market's saturation, with only around 2% market share for Trent, the brokerage anticipates steady 20-24-19% revenue, EBITDA, and EPS CAGR over the fiscal years 2026-2029. Near-term, BofA Securities expects stable demand, acknowledging inflationary pressures that may strain profitability in the short run.

However, they remain confident in Trent's ability to maintain profitability through cost and productivity initiatives. In the long term, the brokerage projects revenue, EBITDA, and recurring PAT growth at 20%, 24%, and 19% CAGRs, respectively. Key growth drivers include Trent's Zudio fashion brand, Westside expansion, and its innovative retail concepts.

The firm's success hinges on its integrated operating model, which controls brands, product development, sourcing, pricing, inventory, and store execution via a tech-driven platform.