Trident Ltd Valuation Shifts to Fair Amidst Mixed Market Performance

Valuation Metrics and Recent Changes

As of early February 2026, Trident Ltd's price-to-earnings (P/E) ratio stands at 32.97, a figure that has contributed to the downgrade of its valuation grade from attractive to fair. This P/E level is considerably higher than some of its peers, such as Arvind Ltd, which trades at a more modest P/E of 22.36 and is rated very attractive. Meanwhile, Vardhman Textile, with a P/E of 18.56, is considered expensive but still below Trident’s current multiple.

The price-to-book value (P/BV) ratio for Trident is 3.17, indicating a premium over book value but not excessively so within the sector context. This metric, combined with an enterprise value to EBITDA (EV/EBITDA) ratio of 16.24, suggests that while the stock is not undervalued, it remains within a reasonable range compared to industry averages. For instance, Welspun Living, another peer, trades at a higher EV/EBITDA of 16.38 but with a less favourable PEG ratio.

Trident’s PEG ratio of 0.87 is noteworthy, as it implies that the stock’s price is relatively justified by its earnings growth prospects. This contrasts with Pearl Global Industries, which has a PEG ratio of 1.27, signalling a more stretched valuation relative to growth.

Financial Performance and Returns Analysis

Examining Trident’s return on capital employed (ROCE) and return on equity (ROE) reveals moderate profitability, with the latest ROCE at 10.73% and ROE at 9.61%. These figures, while respectable, do not markedly outperform the sector, which has seen some companies deliver higher returns on equity and capital.

From a market performance perspective, Trident’s stock price has shown resilience in the short term, with a day change of 11.27% and a one-week return of 11.10%, significantly outperforming the Sensex’s 2.30% gain over the same period. Year-to-date, the stock has appreciated by 7.32%, while the Sensex has declined by 1.74%. However, longer-term returns paint a more mixed picture: over one year, Trident’s stock has declined by 6.78%, underperforming the Sensex’s 8.49% gain. Over three years, the stock is down 12.17%, whereas the Sensex has surged 37.63%. Despite this, the five- and ten-year returns remain impressive at 102.82% and 449.14%, respectively, well above the Sensex’s corresponding 66.63% and 245.70% gains.

Comparative Valuation Within the Garments & Apparels Sector

When compared with peers, Trident’s valuation appears fair but not compelling. Vardhman Textile and Pearl Global Industries are classified as expensive, with P/E ratios of 18.56 and 31.05 respectively, while Welspun Living also holds a fair valuation but trades at a higher P/E of 39.92. On the other hand, Arvind Ltd and Raymond Lifestyle are rated very attractive, with P/E ratios of 22.36 and 63.07 respectively, though Raymond’s high P/E is tempered by other factors such as growth potential and sector positioning.

Some companies in the sector, such as Swan Corp and Alok Industries, are considered risky due to negative or volatile earnings metrics, with Alok Industries currently loss-making and lacking a meaningful P/E ratio. Garware Technologies is viewed as very expensive, trading at a P/E of 36.18 and an EV/EBITDA of 25.46, indicating stretched valuations relative to earnings.

Market Capitalisation and Mojo Score Implications

Trident’s market capitalisation grade is rated 3, reflecting a mid-tier size within its sector. The company’s Mojo Score has deteriorated to 45.0, resulting in a downgrade from Hold to Sell as of 11 August 2025. This downgrade signals caution for investors, highlighting concerns over valuation and growth prospects relative to risk.

Despite the downgrade, the stock’s recent price action has been positive, with the current price at ₹28.72, up from the previous close of ₹25.81. The stock’s 52-week high is ₹34.60, and the low is ₹23.20, indicating a moderate trading range and some volatility. Today’s trading range between ₹28.29 and ₹30.85 further underscores short-term momentum.

Investment Outlook and Considerations

Trident Ltd’s shift from an attractive to a fair valuation grade reflects a nuanced market view. While the company continues to demonstrate solid long-term returns and maintains a reasonable PEG ratio, its elevated P/E and moderate profitability metrics temper enthusiasm. Investors should weigh the stock’s recent strong short-term performance against its longer-term underperformance relative to the Sensex and peers.

The downgrade to a Sell rating by MarketsMOJO, accompanied by a Mojo Score of 45.0, suggests that the stock may face headwinds unless it can improve earnings growth or operational efficiency. The garment and apparel sector remains competitive, with several companies offering more compelling valuations or stronger growth prospects.

For investors seeking stability combined with growth, Trident’s consistent quarterly delivery and proven staying power remain attractive features. However, given the current valuation and rating, a cautious approach is advisable, with consideration given to alternative stocks within the sector that may offer better risk-adjusted returns.

Conclusion

In summary, Trident Ltd’s valuation parameters have evolved, reflecting a transition from attractive to fair. This change is driven by a relatively high P/E ratio, moderate returns on capital, and a Mojo Score downgrade. While the stock has shown resilience in recent trading sessions, its longer-term performance and sector comparisons suggest investors should carefully assess its prospects. The company’s stable fundamentals and consistent delivery provide some reassurance, but the current market environment calls for prudence and thorough analysis before committing fresh capital.

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