Axis Securities shared an upbeat outlook for Trent Limited in its latest update for the retail sector.

What Happened: The Tata Group firm is expected to deliver robust revenue growth in the coming quarters, the brokerage said. This growth will be driven by increased footfall, strong performance across categories and channels and continued store expansion, it said. Trent opened 25 new stores in the April to June period, the company said during its first-quarter earnings earlier this month.

The company is projected to record positive momentum with improved earnings across all formats, reduced losses at Star Bazaar, and stronger performance in its joint venture with Inditex. In the latest results, the company's Star business registered an operating revenue growth of 29% with LFL growth of over 20%. 

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"In recent years, Trent’s adoption of a small-format store model for Star Food, emphasizing sharp pricing and a focus on fresh produce and private labels, has delivered promising results," Axis Securities added in its note.

The brokerage has a "buy" rating on the stock with a target price of ₹7,000.

For the sector at large, Axis predicts volume growth to pick up in rural regions, driven by a better monsoon and rural recovery. Any increase in disposable income is also expected to contribute to the industry's growth. 

Analysts also expect Trent to enter Nifty 50 during the September Rejig. Nuvama Alternative and Quantitative Research had earlier said that Trent and BEL are set to replace Divi’s Laboratories and LTI Mindtree.

Price Action: Shares of Trent closed 0.16% lower at ₹6,783 on Wednesday.

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