Trident shares rally 13% after Q2-profit surges 93%, company announces Rs 4,650 crore capex plan; check target price
Domestic brokerage Motilal Oswal Financial Services has reiterated its 'Neutral' rating on Trident and revised its target price to Rs 24, valuing the stock at 12 times its estimated FY28 enterprise value to EBITDA (EV/EBITDA).
Shares of Trident rallied as much as 13.4 percent to hit an intra-day high of Rs 25.18 on the BSE on Tuesday after the textile fabric manufacturer reported a 93 percent increase in net profit during the July-September quarter of the financial year 2026-27 and announced a Rs 4,650 crore capacity expansion and modernisation plan. The proposed capital expenditure is nearly one-third of the company’s overall market capitalisation of just over Rs 12,500 crore.
Trident shares opened at Rs 23.11 and surged 13.4 percent to hit an intra-day high of Rs 25.18 from the previous closing of Rs 22.20. However, the stock pared most of its early gains during the session. At around 1.05 pm, the stock was trading 5.95 per cent higher at Rs 23.45. Trident Ltd reported a 93.1 percent year-on-year increase in consolidated profit attributable to owners of the company to Rs 175.5 crore for the second quarter of the financial year 2026-27 (Q2FY27), compared with Rs 90.9 crore in the corresponding quarter of the previous financial year.
The company’s revenue from operations declined 3.8 percent to Rs 1,719.48 crore in September quarter from Rs 1,787.17 crore in the year-ago period. Despite the decline in revenue, Trident reported a strong improvement in operating performance, with earnings before interest, taxes, depreciation and amortisation (EBITDA) rising 46.5 percent YoY to Rs 313.7 crore from Rs 214.1 crore in Q2 FY26. EBITDA margin improved significantly to 18 percent in the September quarter, compared with 12 percent in the corresponding quarter last year, marking an expansion of 600 basis points.
On a sequential basis, profit attributable to owners increase 11.1 percent in Q2 FY27 from Rs 158.09 crore in Q1 FY27. Revenue declined 3.8 percent in the quarter under review against Rs 1,786.83 crore in the year-ago period, while total expenses fell 4.9 percent. Trident approves Rs 4,650 crore capacity expansion Apart from the quarterly results announcement on Monday, Trident also informed that its board gave in-principle approval to a capacity expansion and modernisation project involving an investment of Rs 4,650 crore across its business segments.
The plan includes capacity addition of 99,840 spindles at the company’s existing yarn manufacturing facility at Budhni in Madhya Pradesh. The plan also involves modernization and replacement of older machinery as 48,000 old spindles are being modernized to 70,176 new spindles on finer counts and 960 old rotors being replaced with 2,400 new rotors, according to a regulatory filing. The company also plans to set up a new yarn manufacturing facility at Dhar in Madhya Pradesh, with a capacity of 1,99,680 spindles.
It has already acquired 179.2 acres of leasehold land for the project at a cost of approximately Rs 106.09 crore. Further, the plan also includes expansion of the company's sheeting business through addition of 336 looms, enhancement of paper manufacturing capacity by 28 TPD and setting up of 60 MW Hybrid Renewable Energy Project comprising 60 MW Wind Power and 20 MW Solar Power (AC) to support sustainable operations and improve energy efficiency.
Motilal Oswal on Trident share: Target price Rs 24, upside 8% Domestic brokerage Motilal Oswal Financial Services has reiterated its 'Neutral' rating on Trident and revised its target price to Rs 24, valuing the stock at 12 times its estimated FY28 enterprise value to EBITDA (EV/EBITDA). The brokerage noted that Trident’s home textile portfolio declined due to a dip in bed linen as well as bath linen, while the yarn and paper businesses remained flat.
It expects the home textile portfolio to clock a 5.6 percent CAGR over FY26-28, driven by higher demand, while yarn and paper businesses are expected to clock at 6.3 percent and 12.6 percent CAGR, respectively. “We model a revenue, EBITDA, and PAT CAGR of 7%, 11%, and 17%, respectively, over FY26-28, driven by the home textile portfolio bed linen segment, followed by the yarn and paper portfolios,” it said.
The brokerage flagged raw material price volatility, tariffs in the US market, and a slowdown in export markets as key risks to Trident's performance.
