In an unpredictable market, where speculation often reigns supreme and investors chase quick gains, the approach of long-term investing shines brightly. This is particularly true for Radhakishan Damani, often hailed as India’s answer to Warren Buffett. Known as the “Retail King,” Damani remains unflustered amid market volatility, favoring steady investments in robust businesses over fleeting trends.

Damani’s Investment Philosophy

Radhakishan Damani has built his reputation not by succumbing to market noise but by consistently investing in solid businesses for the long haul. Two of his key investments are currently trading at 45% lower than their peak prices, prompting intriguing questions: Are these stocks truly undervalued? Has Damani identified long-term growth potential that others have overlooked? Let’s take a closer look at these stocks to gain insight.

Spotlight on Trent Ltd

Founded as Lakme Ltd in 1952, Trent Ltd was established in 1998 when Lakme transitioned from cosmetics to apparel retailing, recognizing a wealth of opportunities in the sector. Today, Trent is a multifaceted retailer dealing in apparel, footwear, toys, and groceries, boasting over 850 stores and a market capitalization of ₹164,382 crore.

Damani has been a shareholder in Trent since December 2015, currently holding 1.27% of the company through Derive Trading and Resorts Private Limited. What keeps him committed to Trent after nearly a decade?

• Impressive Financial Growth:

  • Sales have skyrocketed from ₹2,630 crore in FY19 to ₹12,375 crore in FY24, reflecting a remarkable 36% compound growth over five years.
  • For the first nine months of FY25, sales reached ₹13,000 crore.
  • EBITDA surged from ₹241 crore in FY19 to ₹1,971 crore by FY24, marking a 52% growth.

• Profits on the Rise:

  • Net profits increased from ₹95 crore in FY19 to ₹1,477 crore in FY24, showcasing a 57% compound growth.
• Stock Performance:
  • The share price of Trent has soared from about ₹464 in April 2020 to ₹4,620 as of April 9, 2025—a staggering 900% increase in just five years.

Despite the impressive growth, Trent’s stock is currently trading at approximately 45% below its all-time high of ₹8,346. The company’s price-to-earnings (PE) ratio is 111x, significantly higher than the industry median of 40x, yet the long-term PE median for Trent stands at 165x. With a 24% ROCE, Trent demonstrates strong profitability, and its dividend payout of 27.4% indicates a commitment to returning value to shareholders.

Focus on VST Industries Ltd

Founded on November 10, 1930, in Hyderabad, VST Industries Ltd, originally known as Vazir Sultan Tobacco Company, is a key player in the cigarette industry, associated with British American Tobacco Plc. With a market cap of ₹4,562 crore, VST ranks as the third-largest cigarette manufacturer in India.

Damani has been invested in VST since March 2016, holding 1.3% of the company.

• Financial Overview:

  • Sales have shown modest growth, moving from ₹1,099 crore in FY19 to ₹1,420 crore in FY24, a 5% compound growth.
  • EBITDA remained relatively flat, with figures of ₹353 crore in FY19 and ₹209 crore for the first nine months of FY24.

• Profit Margins:

  • Profits grew from ₹227 crore in FY19 to ₹302 crore in FY24, reflecting a 6% compound growth.
• Stock Movement:
  • VST’s share price has only increased slightly from ₹246 in April 2020 to ₹269 as of April 9, 2025—approximately a 10% rise.

Currently, VST’s stock is trading at 45% below its peak of ₹487. Its PE ratio stands at 19x, which is below the industry median of 30x. Interestingly, the company’s PE has remained stable over the past decade.

Is Damani’s Strategy Worth Considering?

Radhakishan Damani’s long-standing investments in Trent Ltd and VST Industries Ltd offer valuable insights into his investment strategy. These stocks are not just fleeting choices; they are carefully selected pillars of his portfolio. The fact that they are currently trading 45% lower than their peak prices makes them even more intriguing. Given Damani’s track record, these choices warrant attention.

Both companies present unique narratives. Trent showcases rapid growth in sales and profits, positioning itself as a potential retail giant, while VST maintains steady performance amidst a challenging tobacco market. Each faces distinct challenges, including Trent’s elevated stock price and VST’s impending leadership transition.

Damani’s unwavering confidence in these companies suggests he perceives potential beyond immediate market fluctuations. Whether it’s Trent’s growth prospects or VST’s enduring value, these stocks are certainly ones to keep an eye on—promising opportunities that could surprise the market.

Final Thoughts

Investing based on thoughtful analysis rather than market noise is a strategy worth emulating. As both Trent and VST navigate their respective challenges, they may offer valuable lessons in long-term investment resilience.

For anyone contemplating investments, it’s essential to conduct thorough research and consult with financial advisors to align choices with personal investment goals.