Zudio-owner Trent‘s shares were upbeat on the bourses on Thursday as global brokerage Citi initiated coverage on the stock.

What Happened: Citi initiated Trent coverage with a “buy” call on the stock with a target price of ₹9,250, representing an upside of 21% from its closing price on Wednesday.

The transformation of the company from single-format to multi-format retail led to its revenue growing 36% from FY19 to FY24, the brokerage noted. It said that the brand’s multi-category presence in fashion, grocery and personal care led to a higher revenue growth rate.

See Also: RVNL Wins Orders Worth ₹838 For Nagpur Metro Works: Report

Citi is also optimistic about the firm’s capability to turn around its retail business with Star Hypermarket, leveraging the lessons it has learnt from running Westside and Zudio.

Moreover, Citi believes the brand is capable of scaling up its new projects include its MISBU outlets, the joint venture with MAS Fashion and its new high-end apparel brand Samoh.

From FY24 to FY27, Citi sees the company’s revenue growing at a rate of 41%, EBITDA growing at a compounded annual growth rate (CAGR) of 44% and a profit CAGR of 56%.

Citi’s coverage of the stock comes days ahead of its addition to the Nifty 50 index. Trent and BEL are poised to replace Divi’s Laboratories and LTIMindtree in the Nifty 50 September rejig, the NSE said in a circular in August. Moreover, reports say that analysts also expect the company to replace Bajaj Finserv in Sensex rejig in December. 

Price Action: Trent shot up by ₹3.03% to 7,846 on Thursday morning.

Read Next: Power Grid Top Gainer As Nifty 50 Races To New All Time High