Stock Check: This Tata Group company is the only Nifty 50 stock to give multibagger returns in 2024; is it still a buy? | Stock Market News

Multibagger stock: Tata Group’s retail arm, Trent, has emerged as the only stock from the Nifty 50 pack that has delivered multibagger returns in 2024. The stock has skyrocketed by 125 per cent compared to a modest 13.5 per cent rise in the benchmark Nifty 50 index. Over the last year, Trent has recorded an impressive rally of 139 per cent, underlining its robust growth trajectory.

Performance Highlights

Trent has delivered positive returns in 10 out of the 12 months of 2024, with a 1.5 per cent gain in December so far, following a two-month losing streak. The stock declined 4.7 per cent in November and 6 per cent in October. Before this, Trent sustained a positive run for nine consecutive months from January to September.

Currently trading at ₹6,876.55, the stock is about 18 per cent below its all-time high of ₹8,345.85, achieved in October 2024. It has, however, gained over 141 per cent from its 52-week low of ₹2,850, recorded in December 2023.

With these remarkable gains, investors are contemplating whether the rally has further room to grow or if Trent’s performance has peaked. Here’s what analysts have to say:

Technical Analysis

The outlook for the stock looks bullish on the technical charts, especially following the recent corrective phase. Analysts expect the stock to trade above ₹7,200 levels if it breaks above key resistance levels.

“Trent has shown a strong recovery from its 100-day Exponential Moving Average (DEMA) after a 25 per cent dip from its peak. Currently trading near its short-term EMAs, the technical outlook appears slightly bullish. Historically, the stock has found support at the 50 and 89 DEMA levels,” said analysts at Angel One.

The 100 DEMA around ₹6,660 is expected to act as a cushion, as the stock has gained 10 per cent from its recent swing low, the brokerage said, although it cautioned that the possibility of profit-booking cannot be ignored, with the ₹7,150-7,200 range acting as a stiff resistance on the upside. A decisive breakthrough above this range could fuel continued momentum, it added.

Commenting on key levels for Trent stock, Ajit Mishra, SVP Research at Religare Broking, stated that a drop below ₹6,650 could lead to further downside towards ₹6,200, while a strong close above ₹7,050 could reignite momentum, with the potential to reach ₹7,250.

Trent shares have been undergoing a correction after a meteoric rise over the last two years. From ₹1,150 in January 2023 to a record high of ₹8,322 in October 2024, the stock has witnessed a near-vertical climb. It is currently in an intermediate corrective phase while maintaining support at its 100 DEMA, Mishra said.

Fundamental Outlook

International brokerage Morgan Stanley reiterated its ‘overweight’ stance on Trent following the launch of its new standalone store format, Zudio Beauty, marking its entry into the mass-priced beauty segment.

Morgan Stanley set a target price of ₹8,032, projecting an eight per cent upside. The brokerage noted that beauty and personal care (BPC) sales were already a significant contributor to Westside and Zudio stores, and the segment has scaled up over time as customers leaned towards more indulgent spending.

Earlier in September, Citi had initiated coverage on Trent with a ‘buy’ rating, assigning a price target of ₹9,250. The stock was also included in Citi’s Pan-Asia high-conviction focus list.

Citi highlighted Trent’s ability to leverage its supply chain and insights from its Westside and Zudio formats while successfully turning around its Star Bazaar business. The brokerage lauded Trent’s transformation into a multi-format player, driving a 36 per cent revenue CAGR from FY19 to FY24.

As a diversified player across fashion, lifestyle, grocery, and personal care, Trent is expected to report industry-leading CAGRs for revenue, EBITDA, and PAT at 41 per cent, 44 per cent, and 56 per cent, respectively, for FY24–27, Citi said.

Earnings Performance

Trent, the fashion and lifestyle retailer, reported consolidated revenue from operations of ₹4,156.67 crore for Q2 of FY25, marking a 39.3 per cent increase from ₹2,982.42 crore in the same period of the previous year. The company’s consolidated net profit for the September quarter rose by 46.9 per cent year-on-year to ₹355.06 crore, compared to ₹228.06 crore in the corresponding period last year.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.