This Tata Group stock likely to cross Rs 2,500 mark but high valuations could spoil the party; here’s why
The stock opened higher at Rs 2064.95 today against the previous close of Rs 2049.40 on BSE. The scrip has climbed 204% in the last three years and gained 534% in five years.
- Oct 10, 2023,
- Updated Oct 11, 2023 9:38 AM IST
Shares of Tata Group firm Trent Ltd are likely to cross the Rs 2,500 mark after a short phase of consolidation since the second half of August 2023. Trent stock, which moved between Rs 2,000 and Rs 2,100 zone since August 21 is headed for targets of Rs 2330 and Rs 2520, said Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher, adding that it needs a decisive breach above Rs 2,100 zone to trigger a rally. A target of Rs 2,520 amounts to an upside of 21% from the current market price.
“At the same time, a break below Rs 2000 level would slightly weaken the bias with major support lying near Rs 1890 zone. Currently, the significant 50EMA level is at Rs 1985 zone and as long as the stock is above this indicator, the overall bias is maintained intact," said Parekh.
However, HDFC Institutional Research is concerned about the high valuations of the Tata Group stock. It has assigned a target price of Rs 1,370 per share.
"Trent continues to run circles around peers in terms of growth. Its disciplined working capital management and well-capitalised balance sheet remain best-in-class. However, its heady valuation (77 times Sep-25 EV/EBITDA- consolidated) restrains us from becoming constructive on the stock. Hence, we maintain SELL with a SOTP-based target price of Rs 1,370/share," said the brokerage.
The stock opened higher at Rs 2064.95 today against the previous close of Rs 2049.40 on BSE. The stock has climbed 204% in the last three years and gained 534% in five years. In a year, the Tata Group stock has climbed 44.71%. Total 905 shares of the firm changed hands amounting to a turnover of Rs 18.71 lakh on BSE. Market cap of the firm stood at Rs 73,326 crore on BSE. The Tata Group's multibagger stock hit a 52-week low of Rs 1155 on June 22, 2022 and a 52 week high of Rs 2185.30 on September 26, 2023.
Commenting on the outlook of the stock, Mandar Bhojane, Equity Research Analyst at Choice Broking said, "On the daily chart, the price is consolidating near a resistance level, trading in a sideways range of Rs 2092- Rs 2008. If the price closes above Rs 2092, it could target levels of Rs 2185 and Rs 2260 as immediate resistance, while on the flip side, Rs 2008 is an important support level. Furthermore, Trent is currently trading above critical Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs, which reinforces its bullish momentum and suggests the potential for further upward price movement. The Relative Strength Index (RSI) is currently at 51.64 and trending upwards, indicating growing buying momentum."
"Additionally, the Stochastic Relative Strength Index (Stoch RSI) has recently experienced a positive crossover from the oversold region. This combination of technical indicators suggests that Trent may have the potential to reach a target price of Rs 2185 in the near term. To effectively manage risk, it is advisable to implement a stop-loss (SL) at Rs 2008 to protect your investment in case of an unexpected market reversal. In summary, considering the technical analysis and prevailing market conditions, Trent appears to present an attractive buying opportunity for those aiming for a Rs 2185 price target, provided that prudent risk management measures are in place," added Bhojane.
Abhijeet from Tips2trades said, "Trent Ltd is bullish on the daily charts and a close above the resistance of Rs 2086 could lead to the target of Rs 2180 in the near term. Strong support will be at Rs 2022."
Aditya Gaggar, Director of Progressive Shares sees the stock at Rs 2,470 in the near term.
"The stock is in the secular uptrend with a higher top and higher bottom formation. Currently, it is forming a bullish flag and pole formation. The pattern breakout point is Rs 2120 and as per the pattern, the target is Rs 2470," said Gaggar.
Meanwhile, DAM Capital has mentioned Trent as a stock with a potential to double in three years.
"On almost a doubling of effective store area (25% CAGR over FY23-FY26E) we expect the absolute EBITDA/sqft flow through to improve significantly from Rs 2,100 to Rs 3,100 over the same time frame (plus 47%)," said the brokerage.
In terms of technicals, the relative strength index (RSI) of the stock stands at 50.4, signaling it's trading neither in the oversold nor in the overbought zone. Trent shares have a beta of 0.9, indicating average volatility in a year. Trent stock is trading lower than the 10 day, 20 day, 30 day but higher than the 5 day, 50 day, 100 day, 150 day and 200 day moving averages.
Trent reported a 45% rise in consolidated net profit at Rs 166.67 crore for the June quarter of FY24 against a profit of Rs 114.93 crore in the corresponding quarter of the previous financial year. Revenue zoomed 45.7 percent to Rs 2,628.37 crore in Q1 against Rs 1,803.15 crore in the year-ago quarter.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Also read: IFL Enterprises shares jump 7% after order win, signing MoU with Aussie entity
Shares of Tata Group firm Trent Ltd are likely to cross the Rs 2,500 mark after a short phase of consolidation since the second half of August 2023. Trent stock, which moved between Rs 2,000 and Rs 2,100 zone since August 21 is headed for targets of Rs 2330 and Rs 2520, said Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher, adding that it needs a decisive breach above Rs 2,100 zone to trigger a rally. A target of Rs 2,520 amounts to an upside of 21% from the current market price.
“At the same time, a break below Rs 2000 level would slightly weaken the bias with major support lying near Rs 1890 zone. Currently, the significant 50EMA level is at Rs 1985 zone and as long as the stock is above this indicator, the overall bias is maintained intact," said Parekh.
However, HDFC Institutional Research is concerned about the high valuations of the Tata Group stock. It has assigned a target price of Rs 1,370 per share.
"Trent continues to run circles around peers in terms of growth. Its disciplined working capital management and well-capitalised balance sheet remain best-in-class. However, its heady valuation (77 times Sep-25 EV/EBITDA- consolidated) restrains us from becoming constructive on the stock. Hence, we maintain SELL with a SOTP-based target price of Rs 1,370/share," said the brokerage.
The stock opened higher at Rs 2064.95 today against the previous close of Rs 2049.40 on BSE. The stock has climbed 204% in the last three years and gained 534% in five years. In a year, the Tata Group stock has climbed 44.71%. Total 905 shares of the firm changed hands amounting to a turnover of Rs 18.71 lakh on BSE. Market cap of the firm stood at Rs 73,326 crore on BSE. The Tata Group's multibagger stock hit a 52-week low of Rs 1155 on June 22, 2022 and a 52 week high of Rs 2185.30 on September 26, 2023.
Commenting on the outlook of the stock, Mandar Bhojane, Equity Research Analyst at Choice Broking said, "On the daily chart, the price is consolidating near a resistance level, trading in a sideways range of Rs 2092- Rs 2008. If the price closes above Rs 2092, it could target levels of Rs 2185 and Rs 2260 as immediate resistance, while on the flip side, Rs 2008 is an important support level. Furthermore, Trent is currently trading above critical Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs, which reinforces its bullish momentum and suggests the potential for further upward price movement. The Relative Strength Index (RSI) is currently at 51.64 and trending upwards, indicating growing buying momentum."
"Additionally, the Stochastic Relative Strength Index (Stoch RSI) has recently experienced a positive crossover from the oversold region. This combination of technical indicators suggests that Trent may have the potential to reach a target price of Rs 2185 in the near term. To effectively manage risk, it is advisable to implement a stop-loss (SL) at Rs 2008 to protect your investment in case of an unexpected market reversal. In summary, considering the technical analysis and prevailing market conditions, Trent appears to present an attractive buying opportunity for those aiming for a Rs 2185 price target, provided that prudent risk management measures are in place," added Bhojane.
Abhijeet from Tips2trades said, "Trent Ltd is bullish on the daily charts and a close above the resistance of Rs 2086 could lead to the target of Rs 2180 in the near term. Strong support will be at Rs 2022."
Aditya Gaggar, Director of Progressive Shares sees the stock at Rs 2,470 in the near term.
"The stock is in the secular uptrend with a higher top and higher bottom formation. Currently, it is forming a bullish flag and pole formation. The pattern breakout point is Rs 2120 and as per the pattern, the target is Rs 2470," said Gaggar.
Meanwhile, DAM Capital has mentioned Trent as a stock with a potential to double in three years.
"On almost a doubling of effective store area (25% CAGR over FY23-FY26E) we expect the absolute EBITDA/sqft flow through to improve significantly from Rs 2,100 to Rs 3,100 over the same time frame (plus 47%)," said the brokerage.
In terms of technicals, the relative strength index (RSI) of the stock stands at 50.4, signaling it's trading neither in the oversold nor in the overbought zone. Trent shares have a beta of 0.9, indicating average volatility in a year. Trent stock is trading lower than the 10 day, 20 day, 30 day but higher than the 5 day, 50 day, 100 day, 150 day and 200 day moving averages.
Trent reported a 45% rise in consolidated net profit at Rs 166.67 crore for the June quarter of FY24 against a profit of Rs 114.93 crore in the corresponding quarter of the previous financial year. Revenue zoomed 45.7 percent to Rs 2,628.37 crore in Q1 against Rs 1,803.15 crore in the year-ago quarter.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Also read: IFL Enterprises shares jump 7% after order win, signing MoU with Aussie entity