Trent Stock Posts Biggest One-Day Gain In Five Months On MSCI Inclusion
Shirts are displayed on mannequins in the menswear department of a Westside store operated by Trent Ltd., the retail unit of Tata Group, in Mumbai, India. (Photographer: Kanishka Sonthalia/Bloomberg)

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.

Also read: 12 Indian Stocks To Be Added And Two Removed From MSCI Index

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