Despite dividend, bonus shares in Q4, this Tata stock slumped 5% in 2 days - Time to buy?

Trent share price: Tata Group firm, Trent Ltd shares declined in early trade on Friday to touch a day’s low of Rs 4,210. With this, the counter has declined for the second straight session after the company's Q4 numbers were announced.

 The stock has declined as much as 5% over the past two sessions, including today’s drop. In the previous trading session, the scrip settled 4.21% lower at Rs 4,248.80 on the BSE, making it the biggest laggard in the 30-pack Sensex index.

Trent dividend & bonus

The selling pressure comes despite the Tata Group retail arm rewarding shareholders with corporate actions. According to a stock exchange filing, Trent's board recommended a hefty dividend of 600% or Rs 6 per equity share of Re 1 face value. 

Alongside the dividend, the board approved the issuance of bonus shares in a 1:2 proportion. This means investors would receive one bonus equity share of Re 1 each for every two fully paid-up equity share they currently hold. 

What Brokerages say

In its latest research note, Axis Direct said that demand softened during the quarter due to macro uncertainties and cautious discretionary spending, though the structural growth outlook remains intact. 

"The recent correction in the stock price enhances the risk-reward profile, offering an attractive entry point for long-term investors," Axis noted, maintaining its 'Buy' rating on the stock with a target price of Rs 4,960.

ICICI Direct echoed a similar outlook, stating that a cautious stance by consumers led to softening in discretionary consumption leading to low single digit LFL growth. 

"Revenues grew by 20% in Q4; Demand trend remains subdued; store expansion to drive revenue growth in the near term," ICICI Direct said. The brokerage has assigned a 'Buy' recommendation with a target price of Rs 5,075.