This Tata Group company stock gains over 6% as its Q4 profit jumps multi-fold

Shares of Tata Group’s retail arm company-Trent started the session on a positive note and cliched a new all-time high of Rs 4628.85 after posting stellar Q4 results just ahead of the close of the markets in the previous day’s trade.

After notching an all-time high in the previous day, shares of the company ended over 1 per cent higher at Rs 4351.45 per share.

Tata group’s retail arm Trent Ltd on 29Apr24 reported a multi-fold increase in consolidated net profit at Rs 712.09 crore for the fourth quarter ended March 2024, helped by exceptional item gains.

The company had posted a consolidated net profit of Rs 44.95 crore in the January-March quarter a year ago, according to a regulatory filing from Trent Ltd, which operates retail stores under the brand names — Westside, Zudio and Star.

Its consolidated revenue from operations was up 51 per cent to Rs 3,297.70 crore during the quarter under review. It was at Rs 2,182.75 crore in the year-ago period, it added.

During the quarter, Trent had a gain of Rs 576.07 crore as it “reassessed the estimates of measurement and recognition of the right of use assets including related security deposits and corresponding lease liabilities” of lease contracts for its store operations. Trent’s total expenses were higher at 39.21 per cent in the March quarter to Rs 3,073.54 crore in FY24.

“Given the accounting standards, the consolidated top line does not include revenues for our Trent Hypermarket business. Nevertheless, the results include a proportionate share of the profitability of this venture accounted basis the equity method, the company said.

The total consolidated income of Trent was at Rs 3,374.57 crore in the March quarter, up 48.8 per cent.

What global brokerages suggest on Trent after Q4 show?

Jefferies maintains a hold call on the stock with a target raised to Rs 4150 from Rs 3500 per share price.  Despite posting another strong quarter, the global brokerage is of the view that weak disclosures, however, leave a lot to imagination (e.g., B/S contraction due to Ind AS 116 in Mar-24). With >$18bn m/cap, see merit in following best practices from group firms like Titan & TCPL, added Jefferies.