The Hindu Business Line : Trent hits new high on growth prospects

THE stock of Tata Group's retail outfit, Trent, today closed at its 52-week high at Rs 685.40 with surge in traded volumes. Nearly 20 per cent upward movement was frozen at the upper circuit.

According to brokers, the heightened interest could be attributed to a very positive assessment of the market regarding its growth prospects.

It is understood that a few long-term investors have picked up the stock today.

According to a fund manager, the Trent stock is considered the best bet among the retail counters primarily because its margins are better than the others.

"Trent buys directly from manufacturers and sells under its Westside brand name. No other retail chain in the country is pursuing this business model. Moreover, it is a debt-free company, a plus point compared to its peers, and has chalked out clear expansion plans. Two more elements, credibility of the management and enough floating stock, are also working in its favour," he said.

The public holding in the stock is 41.54 per cent, while FII holding is placed at 20.73 per cent. According to market players, the forthcoming rights issue of partly convertible debentures is seen as an opportunity for gaining further foothold in the counter by an entrant.

Apart from its plan to set up Westside shops in all large towns with a population of over one lakh, the company has forayed into mass market retailing with its Star India Bazzar outlets. While Westside stores sell textiles, household accessories, cosmetics and perfumes in an upmarket ambience (with a coffee shop managed by the Taj group), Star India Bazzar provides household items, grocery, food and beverages, health and beauty products as also electronics items targeted at the budget buyers through discounted prices.

According Mr Ritesh Nair of Anagram Stockbroking, the stock at today's closing price traded at 55 times its trailing 12-month EPS of Rs 12.4.

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