Trent Stock Posts Biggest One-Day Gain In Five Months On MSCI Inclusion
Shares of Trent Ltd. posted their biggest single-day gain in nearly five months after the Tata Group’s retail unit that operates Westside brand was included in the MSCI Index.
The company will have a weight of 0.3% on the MSCI standard index, the world’s largest index compiler, which has assets worth close to $15 trillion benchmarked to its indices, said in a statement. MSCI included a total of 12 Indian stocks in the standard index and removed two. Actual buying and selling on the index will take place on Nov. 27 as Nov. 30 is a market holiday in India.
Another possible factor for the surge could be the reports of a potential Covid-19 vaccine that offered hopes of a quicker-than-expected recovery for travel and lifestyle-related stocks.
“Trent remains among the few well-capitalised apparel retailers in India and is likely to withstand the dent on business due to the pandemic,” Jay Gandhi of HDFC Securities had said in a post-earnings note.
Shares of Trent gained as much as 11.7%—the most since June—to Rs 779.9 apiece. The stock had also jumped to a nine-month high in early trade and is currently trading at its highest in two months. The scrip is up for the third straight day and has gained 10% during the period.
Trent, according to Bloomberg data, is trading at an FY22 price-to-earnings multiple of 112 times.
Of the 16 analysts tracking the company, eight have a ‘buy’ rating, ‘five’ suggest a ‘hold’ and the rest recommend a ‘sell’. The stock is trading 12% higher than its 12-month consensus price target of Rs 657.3 apiece.