Trent’s EBITDA grew by 37% from the same quarter last year to ₹656 crore. EBITDA margin for the quarter stood at 16%.
Global brokerage firm Morgan Stanley has maintained an ‘Overweight’ rating on Trent, with a price target of ₹6,359 per share, citing a mix of Q4 hits and misses.
The foreign brokerage noted that fashion LFL business growth was in the mid-single digits.
Greater-than-expected gross margin (GM) compression in Q4 implies some inventory write-offs; nevertheless, the EBITDA margin showed a slight beat.
The profit miss was about 17%, owing to losses from associates.
Jefferies, meanwhile, has slightly tweaked its estimates and retained a ‘Hold’ rating on account of stiff valuation. However, it has raised the price target to ₹5,900 per share.
Trent’s revenue growth moderated to a multi-quarter low, although it remained strong at 29%. Reported EBITDA grew even more stronger, led by a margin surprise.
The margin improvement was supported by cost controls and operating leverage and came in ahead of Jefferies’ expectations.
LFL growth moderated to mid-single digits, which may disappoint some investors. Management partially attributed this to the company’s increasing presence and densification in certain micro-markets. Slowing discretionary consumption could also be a contributing factor, according to Jefferies.
Both Zudio and Westside witnessed sequential growth moderation due to base expansion, subdued demand, and increasing competition, as per the brokerage.
In its base case, Jefferies expects approximately 35% CAGR in standalone sales over FY25–FY28.
Nuvama Institutional Equities has retained a ‘Buy’ rating on Trent, but revised price target lower to ₹6,224 from ₹6,662 earlier.
Nuvama said the current slowdown in LFL is likely due to a combination of factors: weakening demand, cannibalisation from new stores in same micro-areas, potential over-competition and base effects. Moreover, falling LFL growth in the Star portfolio presents a concern that needs resolution for the format to achieve meaningful scale.
Building on the FY25 performance and store addition, the brokerage has tweaked its FY26 and FY27 revenue estimates by -2% and 1% and profit by -9% and -11%.
Kotak, on the other hand, has a ‘Reduce’ rating but has raised the price target to ₹5,250 from ₹5,150 earlier, citing a margin surprise but weak cash generation.
Q4 growth missed expectations due to weak same-store sales growth. Gross margins declined, but cost controls helped support the overall margin print.
There was a significant increase in capex and a decline in free cash flow generation.
Kotak has trimmed its FY26/FY27 revenue estimates by 2%.
The brokerage also noted that Trent stock is trading at 70 times its FY27 price-to-earnings (P/E) ratio, which appears expensive.
Of the 25 analysts tracking Trent, 17 of them have a ‘Buy’ recommendation, while four each have a ‘Hold’ and a ‘Sell’ rating.
Shares of Trent Ltd. were trading 2.83% lower at ₹5,227.95. The stock is down 26% so far in 2025.
