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Trent Ltd delivered a strong Q4FY26 performance, marked by a sharp rebound in revenue growth and robust margin expansion, prompting most brokerages to reaffirm their positive stance on the stock despite elevated valuations. The Tata Group retail arm reported nearly 20 per cent year‑on‑year revenue growth and a 32.6 per cent jump in net profit, driven by aggressive store additions across Westside and Zudio, improved gross margins, and operating efficiencies. While analysts such as Bernstein, Morgan Stanley and Elara Capital highlighted sustained medium‑term growth visibility backed by Tier‑2 and Tier‑3 expansion, caution persists around macro uncertainty, input cost inflation, and capital allocation toward the Star Bazaar business.
Target price Rs5000 (maintained)
Revenue growth rebounds to ~20% YoY with continued strong store additions
Margin beat driven by Westside-led gross margin expansion (+170bps YoY)
Operating EBIT margin improves with mix benefits and efficiencies
Network expansion strong across Zudio and Westside; Tier 2/3 focus continues
SSSG/micro-market growth remains a monitor amid cannibalisation and competition
Near-term risks from macro, input cost inflation and demand uncertainty
Rights issue seen as neutral; core business does not require incremental capital
Concerns around capital allocation towards Star (grocery) expansion and economics
Medium-term outlook of 20% growth and ~11% EBIT margin maintained
Valuation increased to 63x FY28E P/E
Target price Rs 4800 (maintained)
Revenue growth strong with continued store expansion
LFL growth improved to low single digit
Margins supported by operating leverage despite inflation pressures
Expansion into Tier 2/3 markets driving growth visibility
Value the business using SOTP with EV/EBITDA and EV/sales
Target price Rs 4835 (maintained)
Strong margin beat with EBITDA and EBIT ahead of estimates
LFL growth improved to low single digit
Store expansion strong with focus on Tier 2/3 markets
Consumer demand stable but macro uncertainty persists
Fund raise to support expansion and supply chain investments
Target price Rs 4330 (revised upward from Rs4150)
Strong margin beat led by gross margin expansion
Consumer demand showing signs of moderation amid macro uncertainty
Input cost inflation risk emerging
Estimates marginally adjusted despite strong Q4
Value the stock at ~62x FY28E P/E
Target price Rs 4500 (revised)
Revenue growth strong at ~20% YoY led by store additions while LFL remains muted
Margins beat expectations with GM and EBIT expansion
Consumer sentiment cautious amid geopolitical and macro uncertainties
Aggressive store expansion continues across formats
Fund raise planned for expansion and supply chain investments
Limited upside after sharp rally leads to downgrade
Value the stock at ~57x FY28E P/E (standalone)
Maintain HOLD with a TP of Rs 4,828 vs Rs 4,543
Management flagged raw material cost pressures from geopolitical issues, which may impact near-term demand and margins.
Management also flagged rising raw material costs and supplier labour issues, being addressed through calibrated sourcing and selective supplier engagement.
EBITDA margins rose 215bp, driven by gross margin gains and cost optimization, boosting profitability.
Consumer sentiment was stable early Q4, but discretionary spending softened due to macro and geopolitical uncertainties.
Automation investment improved productivity and costs, with most gains now realized.
Board approved ₹25bn raise for upgrades, automation, and Star Bazaar expansion; timelines unclear.
Maintain HOLD with TP of Rs 4,828
Q4FY26 revenue grew 20% YoY to Rs 49.37bn, showing steady growth
EBITDA rose 43% YoY, driven by strong margin expansion and cost control
Adjusted PAT increased 30% YoY, supported by improved profitability metrics
EBITDA margin expanded 215bps YoY to 13.5% due to gross margin gains
Gross margin improved 171bps YoY to 44%, boosting overall operating performance
Consumer demand moderated due to macro and geopolitical uncertainties during quarter
Input cost pressures rising due to raw material inflation and supplier challenges
Store expansion continued with additions in Westside and Zudio formats
Star business growth remained muted at 6% YoY due to store upgrades
Company plans ₹2500 crore investment for store expansion and automation initiatives
Margin expansion largely achieved; future gains may be limited amid cost pressures
Trent’s consolidated revenue from operations was up 19.23 per cent to Rs 5,027.99 crore in Q4 FY26. It was Rs 4,216.94 crore in the year-ago period. The company’s total expenses increased 16.7 per cent in the January-March quarter to Rs 4,520.95 crore in FY26.
The total consolidated income, which includes other income, was at Rs 5,055.90 crore, up 17.8 per cent in the March quarter. For the full year FY26, Trent’s profit was at Rs 1,721.33 crore, up 12.18 per cent year-on-year. Total consolidated income was at Rs 20,189.05 crore, up 16.34 per cent.
Commenting on the results, Chairman Noel N Tata said: “In FY26, the business delivered encouraging performance, while navigating multiple macroeconomic and geopolitical developments with resilience.”
He further added that, “we believe that the consumer sentiment would recover further in the coming months once the geopolitical environment settles down.”
Trent now operates a portfolio of over 1,250 “large-box” fashion stores, with presence across 321 cities, which includes 3 in the UAE. “In Q4FY26, we opened 23 Westside and 109 Zudio stores (including 2 stores in the UAE) and consolidated 1 Westside store and expanded our presence to 47 new cities,” said Trent.
