Motilal Oswal is bullish on Trent has recommended buy rating on the stock with a target price of Rs 610 in its research report dated May 25, 2020.
Motilal Oswal 's research report on Trent
TRENT’s reported 4QFY20 revenue/EBITDA were 4%/28% above estimates due to cost savings in opex. Jan-Feb’20 revenues grew ~33% YoY, highlighting strong performance in the pre COVID-19 period. We have cut our standalone FY21E/FY22E revenue estimates by 10%/9% due to the prolonged lockdown. But our channel checks indicate healthy revenue recovery in stores that have resumed operations. Maintain Buy.
Outlook
We expect TRENT to deliver standalone revenue/PAT CAGR of 9%/50% over FY20-22E on robust growth led by new stores. Our SOTP-based TP of INR610 values Westside and Zara at 34x EV/EBITDA and Star at 2x EV/sales on FY22E.
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