Trent shares extend gains as Motilal Oswal retains 'buy' rating; sees 25% upside potential

Trent shares are down 25 percent since the beginning of the year.

Shares of Tata Group’s Trent Ltd rose by over a percent on July 16, extending their winning run for a second straight session, after Motilal Oswal reiterated its 'Buy' rating, citing the company’s strong growth potential despite a weak discretionary demand environment.

The brokerage has assigned a price target of Rs 6,650 per share, implying an upside potential of 25 percent from the last close. Trent’s back-ended store additions in Zudio will drive growth in FY26, though a recovery in same-store sales across its fashion and Star formats remains a key near-term monitorable, the domestic brokerage added.

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Motilal continues to favour Trent for its aggressive footprint expansion, strong double-digit growth, long runway in the Star business (currently present in just 10 cities), and the scale-up potential in newer categories like beauty, innerwear, and large-format grocery stores. It has maintained its FY26–27 estimates, projecting a FY25–28 CAGR of around 21 percent in revenue, 20 percent in EBITDA, and 18 percent in PAT, led by continued expansion in Zudio.

Motilal added that emerging categories now contribute around 20 percent to Trent’s overall revenue, thanks to strong volume-led growth. The company has rapidly scaled up segments like Beauty, which saw a 65 percent jump in volumes to 81 million units—surpassing many established BPC players.

Innerwear volumes grew 47 percent year-on-year to 50 million units, while Footwear rose 42 percent to 27 million units, outpacing names like Metro and Campus. Trent is also expanding its Beauty segment through Zudio Beauty and recently launched its LGD (Lingerie, Garment, and Dailywear) range under the brand "Pome." Analysts see the continued scale-up of these new categories as critical to sustaining long-term growth.

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In its latest quarterly update, Trent said its revenue grew 20 percent year-on-year in the June quarter—lower than its five-year CAGR of 35 percent. Despite this, last week, Bernstein maintained its outperform rating on the stock, citing that the long-term growth story remains intact. The brokerage noted that the company's Q1 update confirmed a 20 percent year-on-year revenue growth, but believes this should not be seen as the new normal.

At about 10 am, shares of the company were trading at Rs 5,430, higher by 0.7 percent from the last close on the NSE. Trent shares are down 25 percent since the beginning of the year.

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