Buy Trent; target of Rs 6000: Motilal Oswal

Motilal Oswal's research report on Trent

Trent’s revenue growth continued to decelerate in 2QFY26 (+17% YoY), as ~43% YoY area addition growth was offset by sharp ~17% YoY decline in revenue per square foot, indicating store-level sales cannibalization. However, despite revenue growth deceleration and ~90bp YoY gross margin contraction (mix impact), Trent delivered ~16% growth in 2QFY26 pre-INDAS EBITDA (with modest ~10bp YoY margin dip), aided by robust cost controls (employee cost flat YoY, despite 33% YoY store additions).

Outlook

Reiterate BUY on Trent with a revised TP of INR6,000, premised on 44x Dec’27E EV/EBITDA for the standalone (Westside and Zudio) business, ~3x EV/sales for Star JV, and ~1.5x EV/EBITDA for Zara JV.