Trent Shares Jump 12% in 2 Days After Launching New Lab-Grown Diamond Brand

Trent’s stock has surged by 12% over the past two days, reaching an all-time high of ₹8,318.25 on Wednesday. This jump comes after the company launched its new lab-grown diamond (LGD) brand, ‘Pome’, as part of a trial in select Westside stores.

Pome is currently available in a few Westside locations in Mumbai, Bengaluru, Hyderabad, and Gurgaon. Trent is using a kiosk format to test the brand before potentially expanding it. The company aims to build a separate LGD jewelry brand, open standalone stores, and scale up the business.

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Domestic brokerage firm Kotak Equities compared Pome to Trent’s Zudio brand, which focuses on affordable fashion. Pome’s pricing strategy targets making diamonds accessible to a wider audience. For instance, a 1-carat solitaire engagement ring is priced between ₹24,000 and ₹29,000. Estimates suggest that Pome’s lab-grown diamond jewelry is priced at ₹13,000-₹17,000 per carat.

This pricing is competitive, with Pome offering a 30% discount compared to similar natural diamond jewelry priced between ₹15,000 and ₹20,000, and an 80-85% discount on high-end natural diamond jewelry priced at over ₹5 lakh.

Pome is expected to achieve gross margins of around 45-50%, and its retail strategy could match that of brands like Caratlane, with higher sales volumes making up for the lower price points. Lab-grown diamonds are becoming more popular in India as their prices have dropped significantly, with a 1-carat LGD now costing around ₹6,000-₹8,000 in the wholesale market.

With this growing trend, more retailers, including Trent, Goldiam, and Senco, are entering the affordable lab-grown diamond market, which could accelerate its penetration in India.

Global brokerage firm Morgan Stanley has set a target price of ₹8,032 for Trent shares, maintaining an overweight rating. The company’s success in affordable beauty products with its Zudio Beauty brand has strengthened confidence in its ability to expand into new categories like lab-grown diamonds.

Trent’s shares have been performing exceptionally well, delivering a 111.7% return in the last six months, a 297% gain over the past year, and a 175% increase in 2023 alone.