Multibagger stock: Up 19% since Q1 earnings, this Tata Group share hit record high today; more upside ahead?

Shares of Trent Ltd have gained over 19% since the Tata Group firm announced its Q1 earnings. The multibagger stock, which closed at Rs 5642.80 on August 8 scaled a fresh record high of Rs 6745 in the current session. The earnings were announced during market hours on August 9. Amid the current leg of the rally, the stock has entered overbought zone as the relative strength index (RSI) of the stock stands at 72.9. Trent stock is trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages which means its trading in bullish  zone in both long and short terms.

Morgan Stanley has upgraded its stance to overweight on Trent stock. The global brokerage raised its price target to Rs 7400. The brokerage said its recognizes company’s growth potential over the medium term.

Domestic brokerage Motilal Oswal has maintained its buy call on the stock with a price target of Rs 7,040.

Trent's strong performance with double-digit LFL growth and robust footprint additions remains an outlier within our retail coverage universe, which is witnessing a challenging demand environment, said the brokerage adding that after adjusting the value of Star and Zara, the stock is trading at 90 times PE on FY26E for the Standalone business.

However, HDFC Securities is not so bullish on the outlook of the stock. It has given a sell rating with a price target of Rs 3,700.

“Amid the discretionary slowdown, Trent stands tall despite the headwinds of elections and the heatwave. It has positively surprised us in Q1 in terms of both top-line and margins. However, we’ve been batting for a while now to realign Zara’s valuation stencils from growth multiples to net asset value,” said HDFC Securities.

Trent reported a 225% year-on-year rise in consolidated net profit for the June quarter. Net profit climbed to Rs 391 crore in Q1 against net profit of Rs 167 crore in the corresponding quarter of last fiscal.

Revenues rose 56% on-year to Rs 4104 crore compared to Rs 2628 crore in the corresponding quarter a year ago.

EBITDA or earnings before interest, taxes, depreciation and amortisation climbed 199% on-year to Rs 400 crore against Rs 266 crore in the year-ago quarter.

Trent Limited is part of the Tata Group and operates a portfolio of retail concepts. The primary customer propositions of Trent include Westside, one of India's leading chains of fashion retail stores, Zudio, a one stop destination for great fashion at great value and Star, which operates in the competitive food, grocery and daily needs segment.