Trent Stock SET TO SOAR! Motilal Oswal's SHOCKING ₹6,000 Target Revealed - Don't Miss This

Motilal Oswal has reiterated its BUY recommendation for Trent, revising the target price to INR 6,000. This valuation is based on a multiple of 44 times the projected December 2027 Enterprise Value to EBITDA for Trent's standalone brands (Westside and Zudio), approximately 3 times EV/sales for its Star Joint Venture, and about 1.5 times EV/EBITDA for its Zara Joint Venture.

The research report noted that Trent's revenue growth decelerated to 17% year-on-year in the second quarter of fiscal year 2026. This slowdown was primarily driven by a sharp 17% year-on-year decline in revenue per square foot, which offset a strong 43% year-on-year increase in retail area. This suggests potential store-level sales cannibalization.

Despite a nearly 90 basis point year-on-year contraction in gross margins, partly due to a change in business mix, Trent managed to achieve approximately 16% growth in pre-INDAS EBITDA for Q2FY26. This was significantly aided by stringent cost management, with employee costs remaining flat year-on-year even as the company added 33% more stores.

Impact This research report, with a reiterated BUY call and an increased target price, is likely to generate positive sentiment for Trent's stock. Investors often consider such reports, which could lead to increased buying interest and potentially a rise in the stock price, reflecting confidence in the company's strategy and future prospects. Rating: 8/10

Difficult terms explained: * **2QFY26**: Refers to the second quarter of the financial year 2026 (typically July to September). * **YoY**: Stands for Year-on-Year, comparing performance to the same period in the previous year. * **Area addition growth**: The percentage increase in the total retail space or number of stores. * **Revenue per square foot**: A retail metric measuring sales generated for every square foot of store space. * **Store-level sales cannibalization**: Occurs when a new store's sales directly reduce the sales of existing nearby stores. * **Revenue growth deceleration**: The pace at which revenue is increasing has slowed down. * **Gross margin contraction**: The profit margin after deducting the cost of goods sold has decreased. * **Pre-INDAS EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization, calculated using older accounting standards before the implementation of Indian Accounting Standards (INDAS). * **Robust cost controls**: Effective management and reduction of operating expenses. * **Employee cost**: Expenses related to salaries, wages, and benefits for staff. * **Store additions**: The opening of new retail outlets. * **Reiterate BUY**: To reaffirm a previous recommendation for investors to purchase the stock. * **Revised TP**: Stands for Revised Target Price, the analyst's updated price expectation for the stock in the future. * **Premised on**: Based upon or founded on. * **EV/EBITDA**: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a valuation ratio used to compare companies. * **EV/sales**: Enterprise Value to Sales. Another valuation ratio comparing a company's total value to its revenue. * **Standalone business**: Refers to Trent's wholly-owned operations like Westside and Zudio, distinct from joint ventures. * **Star JV / Zara JV**: Refers to joint ventures with other companies (Star Bazaar and Zara respectively) where Trent holds a stake.