Shares of Trent Ltd. are in focus after an institutional research firm upgraded the stock to ‘BUY’, setting a target price of Rs 4,300, which implies an upside of about 24 per cent from Friday’s closing price of Rs 3,476.70. The upgrade follows a sharp correction of over 30 per cent since early September and reflects improving growth visibility driven by aggressive store expansion and a potential revival in same‑store sales growth (SSSG).
The brokerage has valued Trent using a sum‑of‑the‑parts (SOTP) approach, applying a 55 times FY28 price‑to‑earnings multiple for the standalone business and 2 times FY28 EV‑to‑sales for its Star business. The multiple has been revised down from 60 times to better align valuations with the broader discretionary retail universe, while still factoring in Trent’s long‑term growth prospects and brand strength.
While same‑store sales growth remained subdued in low single digits during the period, overall topline momentum was supported by rapid retail footprint expansion.
Zudio added 89 net stores during the nine‑month period, with average store size increasing by about 11 per cent year‑on‑year. Westside also stepped up its expansion, adding 30 net stores in 9MFY26 alone, exceeding its historical annual pace of 14–18 stores seen between FY23 and FY25, with average store sizes up nearly 10 per cent year‑on‑year.
The brokerage believes Trent could be approaching an inflection point in SSSG. It highlighted three key drivers that could aid a recovery: Zudio’s geographic shift toward under‑penetrated northern and eastern regions, which accounted for 58 per cent of incremental store additions year‑to‑date; the fact that 57 per cent of the 309 stores added recently will be fully reflected in SSSG calculations from FY27 onwards; and a more than 50 per cent surge in Westside’s membership base in FY25, which could support repeat purchases and higher store productivity.
Looking ahead, Zudio’s expansion runway remains significant. The brand is expected to add 180–190 stores annually over FY26–FY28, supported by its presence across 225 district catchments, of which 139 currently have five or fewer Zudio stores. In these markets, Zudio already commands over 15 per cent share among value‑fashion peers, indicating limited competitive intensity and ample growth potential.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
