1 week ago
Trent’s Growth Case Endures Despite 45% Stock Correction
Trent is an Indian retail company that owns brands such as Zudio and Westside.
Its share price has fallen 45% from its late-2024 peak.
The company still increased sales by about 18% in the latest quarter.
Its operating profit grew faster than sales, rising 33%.
Zudio is opening many stores, especially in smaller cities.
This growing store network may make it harder for competitors to catch up.
Trent’s profit margin has also improved over the past four years.
However, the company’s valuation remains much higher than that of rival ABFRL.
The article says Trent may still have room to grow, but it does not present the discussion as an investment recommendation.
Trent’s consolidated revenue rose 17.84% year over year to Rs 5,755 crore in the recent quarter.
Operating EBITDA increased 33% to Rs 848 crore, while operating EBIT rose 29% to Rs 732 crore.
Zudio’s store count reached 982, including 216 net additions year over year, with expansion focused on Tier-2 and Tier-3 cities.
Trent’s PAT rose to Rs 532 crore, and its PAT margin increased to 9.24% from 6.2% in Q1 FY23.
The article contrasts Trent’s performance with ABFRL, whose Pantaloons stores fell to 399 and whose recent PAT margin was negative 12.2%.
- Who
- Trent Limited, its Zudio and Westside businesses, and rival Aditya Birla Fashion and Retail Limited (ABFRL).
- What
- Trent’s stock has corrected sharply, while the company continues to report store expansion, revenue growth, and margin improvement.
- Where
- The companies operate in India; Zudio’s expansion is concentrated in Tier-2 and Tier-3 cities.
- When
- The figures discussed are from the recent quarter identified as Q1 FY27; market data is cited as of August 17, 2026.
- Why
- The article argues that Trent’s expanding store network, improving profitability, and lower valuation than at its peak could support continued growth, while acknowledging competition and valuation risks.
Trent’s Growth Case
Valuation and Competition Concerns
Store-network expansion
Trent’s Growth Case
Zudio’s 982 stores and rapid additions, particularly in Tier-2 and Tier-3 cities, could create a difficult-to-replicate network and support future growth.
Valuation and Competition Concerns
The article acknowledges that future competition could increase, and its projection that Zudio may approach 2,000 stores by 2030 is an estimate rather than a reported result.
Profitability
Trent’s Growth Case
Operating EBITDA grew 33%, faster than the 18% revenue growth, while Trent’s PAT margin expanded to 9.24%, suggesting improving operating leverage and pricing strength.
Valuation and Competition Concerns
Higher margins and future profit growth are not guaranteed; the article only presents further margin expansion as potential, partly comparing Trent’s 12.72% EBIT margin with Zara’s roughly 20% operating margin.
Share valuation
Trent’s Growth Case
Trent’s price-to-earnings multiple has fallen from about 150 at its peak to 87.50, with a forward multiple below 70 based on assumed FY27 PAT growth of 25%-30%.
Valuation and Competition Concerns
Even after the correction, Trent’s EV/EBITDA multiple of 39.58 remains far above ABFRL’s 12.89 and the industry median of 12.74, leaving valuation as a key risk.
Key facts
- Trent stock decline
- Down 45% from its late-2024 peak of Rs 5,500; the article also reports an 18% decline over the last year.
- Recent-quarter revenue
- Rs 5,755 crore, up 17.84% year over year.
- Operating EBITDA
- Rs 848 crore, up 33% year over year.
- Zudio stores
- 982 stores in the recent quarter, including a year-over-year increase of 216 stores.
- Trent PAT margin
- 9.24% in the recent quarter, compared with 6.2% in Q1 FY23.
- ABFRL Pantaloons stores
- 399 stores in the recent quarter, down from 405 stores in the comparable period.
- Relative valuation
- Trent’s EV/EBITDA was 39.58, compared with 12.89 for ABFRL and an industry median of 12.74.
Sources
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