Trent shares in focus after Q1 profit rises 9% YoY. Should you buy, sell or hold?

Economic Times

07-08-2025

Shares of lifestyle retailer Trent will be in focus on Thursday after the company reported a 9% year-on-year (YoY) increase in consolidated net profit to Rs 425 crore for Q1FY26, compared to Rs 391 crore in the same quarter last year.
ADVERTISEMENT Revenue rose 19% YoY to Rs 4,883 crore from Rs 4,104 crore. On a sequential basis, profit after tax (PAT) was up 36% from Rs 312 crore in Q4FY25, while revenue increased 16% from Rs 4,217 crore.
Profit before tax (PBT) for the quarter came in at Rs 565 crore, up 13% YoY.
Trent clarified that its consolidated revenues do not include those from the Trent Hypermarket business due to accounting standards, though its share of profitability from the venture is accounted for under the equity method.On a standalone basis, PAT rose 23% YoY to Rs 423 crore, while revenue grew 20% to Rs 4,781 crore from Rs 3,992 crore.The company said revenue growth remained healthy across markets despite the early onset of monsoon and geopolitical disruptions. Like-for-like growth in the fashion portfolio was in low single digits for Q1FY26, with revenue contributions across concepts aligning with strategic expectations.
ADVERTISEMENT Commenting on the performance, Chairman Noel N Tata said, 'We remain focused on evolving our differentiated consumer proposition that appeals to a wider audience across diverse markets. Notwithstanding continuing competitive intensity and interim trends, we believe an unwavering focus on being relevant to our customers and building resilience with our business model choices will, over time, enable us to deliver significant value.'
ADVERTISEMENT Avendus has downgraded Trent to a 'Reduce' rating and cut the target price to Rs 5,000 from Rs 5,650.It expects FY26 to be a consolidation phase, with growth likely to moderate but remain healthy. The brokerage cited muted macroeconomic conditions that may cap Trent's market capitalisation near Rs 2 lakh crore. Revenue estimates have been reduced by 4% for FY26 and 6% for FY27, though EBITDA margins are expected to remain stable at 17–18%. With the stock trading at 65x PE, Avendus sees the risk-reward as unattractive.
ADVERTISEMENT Motilal Oswal Financial Services (MOSL) has retained a 'Buy' rating on Trent, revising the target price to Rs 6,400 from Rs 6,600.The brokerage highlighted margin expansion as a positive surprise despite slower growth. While EBITDA estimates for FY26–27 remain unchanged, PAT estimates have been trimmed by 1–5% due to higher depreciation. MOSL projects a compound annual growth rate (CAGR) of 20% for revenue, 18% for EBITDA, and 16% for PAT over FY25–28. It sees acceleration in revenue growth as a key trigger for the stock.
ADVERTISEMENT Antique has maintained a 'Buy' rating on Trent and raised the target price to Rs 7,301 from Rs 6,045.The brokerage noted that profitability exceeded estimates during the quarter, even as fashion concepts recorded low single-digit like-for-like (LFL) growth. Despite a weak demand environment, Trent continues to be an outperformer. Antique expects operating expense rationalisation to further support profitability and has raised its EBITDA estimates for FY26 and FY27 by 3% each.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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