Tata Group’s value retail arm, Trent Ltd., faced a sharp jolt on April 30 as its stock fell by nearly 4%, following the release of its Q4 FY25 results that showed a noticeable slowdown in revenue growth. This has raised concerns among investors about the company’s future performance, especially in a competitive retail landscape.
Revenue Growth Hits Multi-Quarter Low
For the quarter ending March 2025, Trent reported revenue from operations of ₹4,217 crore, registering a year-on-year growth of nearly 28%. While that may seem impressive at first glance, this actually marks Trent’s slowest revenue growth since FY21. The deceleration comes as part of a broader trend among both Indian and global apparel retailers, who are seeing growth cool off after the post-pandemic surge.
The company’s adjusted profit—excluding a one-time base quarter gain of ₹543 crore—stood at ₹318.15 crore, a significant jump from ₹128 crore in the same quarter last year. Still, the muted revenue trajectory was enough to spook the market. At 9:40 AM on the day of the results, Trent shares were trading at ₹5,185.5 on the NSE, down 3.8% from the previous close.
Store Expansion Strategy in Focus
Trent continued to aggressively expand its footprint in FY25. It opened 40 new Westside stores and 244 new Zudio outlets, while also consolidating 24 outlets of each brand. As of March 31, Trent’s store portfolio includes 248 Westside and 765 Zudio stores, along with 30 outlets under other lifestyle concepts.
In its official filing, the company noted:
“We are evolving the quality of our store portfolio and we are consciously increasing the density of our presence in such markets.”
Trent clarified that it aims to drive revenue growth by focusing on comparative micro markets, rather than solely relying on performance comparisons across existing stores.
Margins Improve, But Like-for-Like Growth Slows
Despite the headwinds, Trent’s EBIT margin expanded by 100 basis points in Q4FY25. However, the company reported mid-single digit like-for-like (LFL) growth, a decline from the high-single digit LFL seen in Q3FY25. This lower LFL growth failed to deliver operating leverage, raising concerns about the long-term scalability of its business model.
Brokerages React: Mixed Calls on Trent Stock
Domestic brokerage Nuvama Institutional Equities pointed out several potential reasons behind the slowing LFL growth:
Weakening consumer demand
Cannibalisation due to new stores in overlapping micro-markets
Over-competition
Base effects from strong previous quarters
Nuvama has trimmed its price target for Trent to ₹6,224, down from ₹6,662, though it maintained a ‘Buy’ rating.
On the other hand, Jefferies took a more cautious stance. The international brokerage raised its price target to ₹5,900, but kept its ‘Hold’ rating, noting that the moderation in like-for-like growth could disappoint investors in the near term.
Despite the recent concerns, Jefferies believes Trent could still achieve a 35% CAGR in standalone sales from FY2025 to FY2028 under its base-case scenario.
In summary, while Trent has shown strong profit growth and continued expansion, the slowdown in revenue and like-for-like sales growth has shaken investor confidence. With mixed signals from brokerages, the big question for investors now is: Buy, Sell, or Hold?
What do you think—is this a long-term opportunity or a sign to be cautious?
