TRENT ANALYSIS 30.09.24

GS MEMBER : Please guide about Trent? Is it the correct time to book profit? I’m sitting on a 90% gain. It was supposed to be a swing but I don’t mind holding it long term Growthsquad : Okay, so we understand your psychology here towards the stock but let me add something to clear your mind :

➡️ When you buy a long term stock, we check very different criteria i.e the valuation of company and Quarterly/Yearly performance. We totally ignore the stock price or technical setups, hence there is no stoploss or target for such stocks. Only if the valuation of stock comes down again to our buying levels we add back or buy the dip.

➡️ For swing, we keep targets as the motto is to earn actively and even though fundamentally stock has higher potential we exit within 2-3 quarters.

So when you’re confused in holding or selling trent, we feel that is because you didn’t enter the stock with definite mind and being driven away with higher returns. However giving an unbiased opinion for long term of the stock :

* Trent is Tata Owned Company.

* Trent is in fashion and clothing industry, owning very fast growing stores like zudio, westside, etc. They’re expanding very fast globally, even Zara (stores in india) is owned by trent.

* Financially Trent is quite strong and profitable with healthy cashflow.

* Valuation wise its overvalued, of course stock has shoot up too high since last 1-2 years due to increased demand of their products and aggressive store expansion which is also reflected in their profits QoQ.

* Management looks very focused on expansion, as demand for its brands is also growing.

Risk factors to consider :

* Valuations are high but not too high, i.e this wouldn’t be a good point to make fresh entry but decent time to hold the stock.

* ⁠Any recession can drop demand for branded products and impact trent growth aspects.

Hence we believe its a good stock for long term but only invest with psychology of being ready and happy for correction so you can add back these stocks at their dips. And if you feel from here if stock corrects 20-30% you will regret not selling it, then you can exit at current levels partially and set a trailing stoploss of 7% for rest of the holdings.

PS a short note : This same stock was in consolidation between 2009 to 2014 - almost 15 years with negative and 0 returns. When the time came and expansion started, stock ran up by ₹85 to ₹7800, you can say its power of long term investing but think about frustration of people holding for that 15 years? Hence we say long term stocks require higher risk appetite and belief or tracking on fundamentals of the stock🙌📈.

Incase ya'll like to share your technical/Fundamental analysis, feel free to drop a mail at contact@growthsquad.in, we will post it here with all due credits. Have a nice day, cheers!

Team Growthsquad