Shares of Trent Ltd fell more than 7 per cent on Monday to hit an intraday low of Rs 1,299.55. The stock finally settled 6 per cent lower at Rs 1,313.85 today, extending its fall for the third straight session.
The company's market capitalisation -- which breached the 50,000-crore mark last week for the first time -- stood at Rs 46,705.72 crore.
Taking closing values into consideration, the stock has surged as much as 24.70 per cent so far in 2022.
The company reported a net profit of Rs 115 crore in the first quarter of the current financial year 2022-23 (Q1 FY23). In Q1 FY22, the company reported a loss of Rs 138 crore due to the Covid-19 pandemic. The revenue of the company rose from Rs 492 crore in Q1 FY22 to Rs 1,803 crore in Q1 FY23.
The Mumbai-based retail company could witness another "8-10 per cent" decline but there's nothing to "worry", an expert opined.
"Westside and Zudio are profitable ventures of the company. Don't see any worry in Trent. The slide comes on the heels of the stock hitting an all-time high. Any further correction is a good time to buy. Another 8-10 per cent correction could be possible, making it another chance to buy on dips," said AK Prabhakar, Head of Capital, IDBI Capital.
Trent, a Tata Group company, operates the retail business under its flagship brand Westside. It also operates Zudio and store chains under the Star brand.
Another expert echoed similar views about the company and suggested "buy the dips" strategy.
"There's nothing to worry about the stock. The company is very well structured in the retail space with more presence in the urban markets. The correction came as the stock hit a 52-week high recently. For us, it is a buy-on dip stock," said Ashish Chaturmohta, director and head of equity advisory research at JM Financials.
AR Ramachandran, co-founder and trainer, Tips2Trades said, "Strong Q1 FY23 earnings led Trent to its all-time high of Rs 1,522 but due to the stock being technically overbought, the stock is now correcting coupled with weaker broader markets. Rs 1,405 will remain strong resistance and investors can ideally start accumulating the stock either of close above this level or near support levels of Rs 1,220."
Manoj Dalmia, founder and director, Proficient Equities said, "Trent shares underwent profit booking after forming higher highs for a long period of time. A closing below Rs 1,282 might cause further selling and reach Rs 1,106 levels. Investors can wait for some price fall and accumulate at dip. The stock might consolidate if current levels are broken on the downside."
Ravi Singh, vice-president and head of Research, Share India said, "Trent stock has appreciated around 55 per cent in the last year making the valuations of the company on the higher side. Also, the major technical levels have been triggered in the counter putting further pressure on the Trent stock. The sell off may continue for some more time, touching the levels of Rs 1,200 in the near term. Investors may exit their holdings and wait for fresh entry levels."
Meanwhile, Indian equity benchmarks tanked today as BSE Sensex cracked 872 points or 1.46 per cent to close at Rs 58,774; while the broader NSE Nifty moved 268 points or 1.51 per cent lower to settle at 17,491.
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