Profitability Takes a Hit Amid Exceptional Gains Last Year
Trent Ltd, the Tata Group’s retail arm, reported a 46% decline in standalone net profit for the fourth quarter (Q4) of FY25, posting ₹350 crore compared to ₹654 crore in the same quarter last year. The significant drop in profits can be attributed to the absence of the exceptional gain of ₹543 crore recognized in Q4FY24, which had resulted from a reassessment of lease terms.
Despite the sharp decline in profit, Trent’s performance came in slightly better than analysts’ expectations. On a sequential basis, however, profit saw a more modest decline, aligning with broader trends seen in the retail and apparel sectors.
Highlights:
Standalone net profit fell by 46% YoY to ₹350 crore.
Q4FY24 profit had been boosted by a one-time gain of ₹543 crore.
Performance exceeded analysts’ estimates, but profit declined significantly from last year.
Strong Revenue Growth, But Sequential Decline Suggests Cooling Market
In terms of revenue, Trent reported a 29% increase in standalone revenue for the quarter, which reached ₹4,203.14 crore, up from ₹3,260.2 crore in the same quarter last year. However, this growth was somewhat tempered by an 8% sequential decline in revenue, signaling the cooling of the fast fashion market, especially after the post-pandemic boom.
On a consolidated basis, Trent’s total income grew by 27.2% year-on-year, reaching ₹4,291.3 crore. However, this marked a 9% decline from ₹4,710.2 crore reported in the December 2024 quarter. The decline from the previous quarter reflects slowing demand and a challenging macroeconomic environment, which is affecting retail performance, especially in urban markets.
Highlights:
Standalone revenue rose 29% YoY to ₹4,203 crore, but declined 8% sequentially.
Consolidated revenue increased 27.2% YoY, but fell 9% from Q3FY25.
Cooling fast fashion market impacts growth, particularly after the post-pandemic surge.
Challenging Retail Environment and Growth Slowdown
Despite the positive revenue growth, the January-March quarter marked Trent’s slowest growth since FY21. The company, which operates retail stores under the Westside, Zudio, and Star brands, has now joined a growing list of apparel brands, both global and Indian, that are facing a slowdown in growth. This includes major brands like Uniqlo, H&M, and Lifestyle, all of which are grappling with decelerating revenue growth following the pandemic-driven surge.
Analysts have pointed out that macroeconomic pressures—particularly in metros and Tier-1 cities—are contributing to the slowdown. Inflationary pressures and slower income growth are leading to stagnant demand in these urban markets, a challenge for retail brands that had been thriving in the post-pandemic boom period.
Highlights:
Trent reports slowest growth since FY21, facing the broader retail slowdown.
Macroeconomic pressures, including inflation and slow income growth, impact demand, particularly in urban areas.
Retail brands globally facing similar deceleration in revenue growth.
Retail Footprint and Expansion Plans
As of March 31, 2025, Trent had a substantial retail footprint, with 248 Westside stores, 765 Zudio outlets, and 30 stores across its other lifestyle concepts. Notably, Zudio, a value retail chain, has expanded internationally, with two stores in the UAE. Despite the challenges, the company remains focused on store expansion, maintaining its leadership position in the retail sector.
Highlights:
Trent operates 248 Westside stores, 765 Zudio outlets, and 30 stores across lifestyle concepts.
Zudio expands internationally with two outlets in the UAE.
Continued focus on store expansion despite slowing growth.
