Buy Trent; target of Rs 6480: Mirae Asset Sharekhan

Mirae Asset Sharekhan's research report on Trent

Trent’s Q1FY26 profitability beat estimates, with EBITDA margin rising by 223 bps y-o-y to 17.5% (versus 15.2% expected) and PAT growing 24% y-o-y to Rs. 423 crore (against Rs. 368 crore expected). Revenue grew by 20% y-o-y. Revenue growth was driven by store additions (37%/9% y-o-y net additions in Zudio/Westside, respectively) and a low single-digit life-for-like (LFL) growth in the fashion concepts. Gross margins of Westside and Zudio remained consistent. Trent added one Zudio store (net) in Q1, taking the count to 248 Westside stores across 86 cities and 766 Zudio stores across 235 cities at Q1FY26-end.

Outlook

Stock has corrected by 15% from recent highs and is trading at 49x/40x its FY26E/FY27E EV/EBITDA, respectively. We maintain a Buy with a revised SOTP-based PT of Rs. 6,480.