Trent Q3 Results: Net Profit Surges 34% to ₹497 Crore, In Line with Estimates
Trent Q3 Results: Tata Group’s retail arm, Trent Ltd, delivered a strong performance in the third quarter of FY25, with net profit rising 34% year-on-year to ₹496.54 crore. The company’s revenue from operations also witnessed a 34% jump, reaching ₹4,656.56 crore. These results were largely in line with market expectations, as analysts had predicted a revenue of ₹4,613 crore and a net profit of ₹505 crore for the quarter.
Strong Growth in Revenue and Profitability
Trent’s total income surged to ₹4,715.64 crore, up from ₹3,546.95 crore in the corresponding quarter of the previous year. However, the company’s total expenses also rose to ₹4,096.08 crore, reflecting increased operational costs due to its rapid expansion strategy.
Expansion and Store Network Growth
During Q3 FY25, Trent significantly expanded its presence across India and even made a move into the international market. The company opened:
- 14 new Westside stores
- 62 new Zudio stores, including one in Dubai
At the end of the quarter, Trent’s store portfolio included:
- 238 Westside stores
- 635 Zudio stores
- 34 stores under other lifestyle concepts
This aggressive expansion strategy has helped the company strengthen its footprint, with its fashion brands covering over 11 million square feet, marking a 33% increase over last year.
Fashion & Retail Performance
Trent’s fashion business saw high single-digit like-for-like (LFL) growth, driven by strong customer demand for its brands. Notably, such as beauty, personal care, innerwear, and footwear have gained momentum, now contributing to over 20% of the company’s total revenue.
On the other hand, the company’s food and grocery business, which operates under Star Bazaar, witnessed a slower LFL growth of 10% compared to 24% in the previous year. However, revenue from this segment continued to grow steadily.
Chairman’s Perspective
Noel Tata, Chairman of Trent, expressed confidence in the company’s growth trajectory, stating:
“We remain on track to strongly expand our reach and, at the same time, improve the quality of our store portfolio. Our aggressive store opening program, along with other strategic initiatives, keeps our growth journey on track. The value proposition of our brands continues to resonate well with customers across geographies.”
He also highlighted the promising potential of Trent’s food business, noting:
“We are applying Trent’s playbook to the Star business and witnessing compelling customer traction. We remain convinced that this business is well poised to shift gears and deliver substantial value to customers and shareholders over time.”
Stake Sale in Massimo Dutti India
In addition to the Q3 results, Trent announced that it would be selling 1.75 lakh shares in Massimo Dutti India for ₹20.75 crore. This deal will reduce its stake in the brand from 49% to 20%. The shares will be acquired by Spain-based Grupo Massimo Dutti, with the transaction expected to be completed by the end of March 2025.
Stock Market Reaction
Despite the strong financial results, Trent’s stock saw a 7% decline after the announcement, trading at ₹5,359 per share as of 2:50 PM on February 6. The stock experienced high trading volumes, nearly four times its 10-day average volume.
Key Financial Ratios
| Metric | Value |
|---|---|
| Market Cap | ₹1,87,474 Cr. |
| Current Price | ₹5,275 |
| 52-Week High/Low | ₹8,346 / ₹3,620 |
| Stock P/E | 126 |
| Book Value | ₹132 |
| Dividend Yield | 0.06% |
| ROCE (Return on Capital Employed) | 23.8% |
| ROE (Return on Equity) | 27.2% |
| Face Value | ₹1.00 |
| Debt to Equity Ratio | 0.39 |
| Industry P/E | 48.5 |
| Total Debt | ₹1,842 Cr. |
| PEG Ratio | 2.23 |
| Intrinsic Value | ₹922 |
| Graham Number | ₹401 |
| Piotroski Score | 8.00 |
| Price to Book Value | 40.1 |
Final Thoughts
Trent’s Q3 results reaffirm its position as a dominant player in India’s retail sector, with strong revenue growth and aggressive expansion strategies. The company’s continued investment in new stores and emerging categories is expected to drive long-term growth.
While the stock faced a temporary setback, the fundamentals of the business remain strong. With a solid business model, strategic expansions, and increasing consumer demand, Trent is well-positioned to deliver long-term value for its shareholders.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.