Brokerages retain bullishness on Trent despite Q2 miss on store consolidation, down 10% since earnings

Given the overall slowdown in consumption, the growth in Trent's bottomline and topline is still healthy, said brokerages.

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26 Aug, 2025 12:21

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Retail player and Zudio operator Trent reported its earnings show for the second quarter ended September on November 7, which came in under expectations.

This caused the Street to sell off shares of the Tata group firm in the previous session, leading to Trent shares toppling over ten percent since the results were announced. However, despite the sour sentiment, brokerages and analysts are still overwhelmingly positive on the firm.

Trent reported a standalone net profit of Rs 423.44 crore, a 46 percent jump from Rs 289.67 crore reported during the same quarter last financial year. Its revenue from operations came in at Rs 4,035.56 crore, higher by 39.9 percent on-year.

While the firm reported solid, industry-beating growth, its earning figures still came in under expectations. Additionally, Trent posted sub-50 revenue percent growth for the first time since Q4FY21, largely caused by the closure of 25 stores (16 Zudio, nine Westside), noted Nuvama Institutional Equities.

At 10 am, shares of Trent were hovering around the Rs 6,322-mark, lower by 2.8 percent on the NSE. Over the past month, the Zara-operator's shares have tanked more than 20 percent.

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The Star format saw a revenue growth of 27 percent on-year, and healthy like-for-like growth at 14 percent on-year. The fashion concept stores, such as Westside, Zudio, and others posted double-digit LFL growth despite subdued consumer sentiments.

According to Motilal Oswal, Trent’s industry-leading growth, driven by healthy SSSG, store productivity, and robust footprint additions, along with the scale-up of Zudio and newer categories, offer a huge runway for growth over the next few years. The brokerage maintained its 'buy' call on Trent, with a price target of Rs 8,200 per share.

Motilal Oswal added that Trent's focus on ramping up Star through Fresh and its own brands, provide an additional growth driver in the grocery segment.

International brokerage Bernstein maintained its outperform call, with a target price of Rs 8,100 per share. While the results were a miss, according to the brokerage, it remained optimistic as the growth story for Trent remains intact.

According to Nuvama Institutional Equities, the growth in profit was  partially a factor of franchise-driven expansion in Zudio. There has been a significant reduction in interest expense, which also helped the PAT grow. The brokerage had a buy call on the player, with a fair value assumption of Rs 7,475 per share.

Given the overall slowdown in consumption, the growth in Trent's bottomline and topline is still healthy, added the brokerage. While the pace of store addition was slower in H1FY25 with
Trent adding 32 stores of Zudio against the guidance of 200 stores for the year, so far in Q3, there seems to be a pick-up in store additions.

Trent’s store growth this quarter was balanced by consolidations across formats. Westside opened seven stores but closed nine, reducing its count to 226 and exiting five cities in Q2. Zudio added 18 stores, expanding to 577 locations, including one in the UAE, and entered 20 new cities. Star added two stores this quarter, taking H1 total to eight additions.

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