Tata Stock At All-Time High After Q3 As Brokerages Raise Target Price

Trent‘s share price continued to make gains on Thursday after the company posted strong quarterly numbers on Wednesday.

What Happened: The Tata Group company reported an increase in net profits for the December quarter, reaching ₹374.6 crore, compared to ₹154.8 crore in the same quarter last year. Revenue for the period stood at ₹3,466.6 crore, marking a robust 50% growth from the previous year’s ₹2,303.4 crore. Both figures surpassed street estimates.

Analyst Reactions: Morgan Stanley has maintained an “equal-weight” rating on the stock raising the target price to ₹3,675 from ₹2,307. The analysts noted that the company posted a strong quarter with robust top-line performance driven by the fashion segment and positive margin surprises. Despite the positive outlook, the risk-reward profile is balanced at current levels, the research firm added.

See Also: Tata Stock Dips As Profits Tumble 21% In Q3

Jefferies maintained a “hold” rating on Trent raising the price target to ₹3,500 from ₹3,050. The analysts said that the company continues to surprise with its strong performance. Despite acknowledging the positive surprises, Jefferies cited valuation concerns as the reason for maintaining the hold rating.

Kotak Securities also maintained its “add” rating for the stock revising the target price to ₹3,800 from ₹2,700. The brokerage in its reports said that the company achieved robust standalone revenue growth of 52.5% year-on-year, maintaining a 40% growth rate on a 4-year compounded annual growth rate (CAGR) basis. Overall, the company’s earnings exceeded expectations during the quarter, the analysts added.

Motilal Oswal also maintained its “buy” rating for the stock with a target price of ₹4,200. The domestic brokerage said that the company’s industry-leading revenue growth is fueled by several factors including healthy same-store sales growth (SSSG) and productivity, robust additions to its footprint and healthy scaling within Zudio. As per the brokerage, these factors collectively provide a significant runway for growth over the next three to five years.

Price Action: Trent’s share price was up 6.17% to trade at ₹3,830.20 shortly after market open on Thursday.

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