Trent Stock Tumbles Amid Slower Revenue Growth
Trent Q4 Results – Tata Group’s retail arm Trent Ltd., known for its brands Westside and Zudio, witnessed a sharp reaction from the markets as its stock plunged nearly 4% on April 30, following a slowdown in revenue growth for the March quarter (Q4 FY25). While the numbers were strong on paper, underlying signals of waning momentum raised caution among investors and analysts alike.
At 9:40 AM, shares of Trent were trading at Rs 5,185.50 on the NSE, down 3.8% from the previous close.
Q4 FY25 Results: A Closer Look
Trent reported revenue from operations of Rs 4,217 crore, representing a 28% YoY increase, but the slowest growth since FY21, flagging concerns of demand saturation and competitive pressure in the retail sector.
The company also disclosed a net adjusted profit of Rs 318.15 crore, up from Rs 128 crore in Q4 FY24, after excluding a one-time gain of Rs 543 crore in the base period.
| Key Financial Metrics (Q4 FY25) | Q4 FY25 | Q4 FY24 | YoY Growth |
|---|---|---|---|
| Revenue from Operations | ₹ 4,217 Cr | ₹ 3,296 Cr* | 28%* |
| Adjusted Net Profit | ₹ 318.15 Cr | ₹ 128 Cr | 148% |
| EBIT Margin | Expanded 100 bps | — | — |
*Excludes one-time gain for comparability.
Store Expansion Still Aggressive
Despite the revenue slowdown, Trent remains bullish on store expansion. In FY25, the company:
- Opened:
- 40 new Westside stores
- 244 new Zudio stores
- Consolidated:
- 24 Westside stores
- 24 Zudio stores
As of March 31, 2025, Trent’s retail footprint includes:
- 248 Westside stores
- 765 Zudio stores
- 30 lifestyle concept stores
The company emphasized its strategy to densify presence in key micro-markets rather than focusing purely on comparable store performance.
Analyst Insights: Caution, But Not Panic
Nuvama Institutional Equities
- Price target lowered to Rs 6,224 (from Rs 6,662)
- Maintains Buy rating
- Flags concerns over:
- Falling like-for-like (LFL) growth
- Possible cannibalisation due to high store density
- Weak demand in Star portfolio
Morgan Stanley
- Maintains Overweight rating
- Target: Rs 6,359
- Notes inventory write-offs may have impacted gross margins
- EBITDA margin surprised positively, offsetting some concerns
Jefferies
- Maintains Hold rating
- Raises target to Rs 5,900
- Points to mid-single digit LFL growth as a letdown
- Predicts 35% standalone sales CAGR (FY25–FY28) in base case
Should You Buy, Sell, or Hold Trent Stock?
✅ Buy If:
- You believe in long-term growth in India’s organized retail.
- You expect operating leverage and margins to improve as store base matures.
- You align with bullish projections like Jefferies’ 35% CAGR forecast.
⚠️ Hold If:
- You’re concerned about short-term volatility due to demand softness.
- You’re waiting for more clarity on LFL growth recovery.
- Valuations seem stretched given near-term earnings risks.
❌ Sell If:
- You expect sustained deceleration in retail consumption.
- You believe Trent’s aggressive expansion might lead to overcrowding and cannibalisation.
- You’re shifting to defensive or higher-yield sectors amid macro uncertainties.
Outlook: Balancing Expansion with Profitability
Trent continues to be a long-term retail growth story under the Tata umbrella. Its ability to scale Zudio’s value retail format and strategically expand Westside will be key. However, investors must watch out for signs of:
- Same-store sales stagnation
- Margin pressure due to discounting or inventory write-offs
- Impact of over-competition in saturated markets
While the Q4 numbers signal resilience in profits, the real test lies ahead — sustaining revenue growth while improving efficiency.
FAQs: Trent Q4 Results and Stock Outlook
Q1: Why did Trent’s stock fall after posting decent profits?
A: Despite strong profit growth, the slowdown in revenue growth and like-for-like sales spooked investors. The market reacted to concerns about long-term sustainability.
Q2: What is like-for-like (LFL) growth, and why does it matter?
A: LFL growth measures performance of existing stores excluding new openings. It reflects true organic growth, and a decline suggests saturation or demand weakness.
Q3: Is Zudio still a growth engine for Trent?
A: Yes, Zudio continues to drive store expansion. However, analysts are concerned that rapid density increase in similar markets may lead to cannibalisation.
Q4: How are brokerages reacting to the results?
A: Mixed. While Morgan Stanley and Nuvama maintain bullish ratings, Jefferies has taken a more cautious approach, highlighting moderation in growth.
Q5: Is Trent a good long-term investment?
A: Trent has strong brand equity and a scalable model. For long-term investors who can tolerate volatility, it remains a compelling play in India’s retail consumption story.
Final Word
Trent’s Q4 results underline a pivotal moment — transitioning from aggressive post-COVID growth to sustainable expansion. With the stock correcting after earnings, investors may find an opportunity to reassess their positioning based on risk appetite and market outlook.
Stay tuned with Narayan Ventures for more in-depth coverage on Trent and other leading Indian stocks.
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