Key retail star Trent has been in focus after it missed the Q1 guidance. Though its consolidated revenue crossed Rs 50,000 crore in Q1FY26, it was lower than the 34 per cent growth expected by the Street. The company’s revenue was impacted by weak demand and sourcing disruptions from Bangladesh. Notably, over 90 per cent of Trent’s merchandise is still manufactured in India.
Despite these hiccups, HSBC remains bullish on Trent’s prospects. “Trent continues to target a revenue growth of 25–30 per cent over the next five years, despite challenges in the retail environment,” analysts at HSBC said in a July 4 report, adding that the company has already doubled its revenues since outlining a 10x growth vision two years ago.
1. Trent sticks to its plan: 250 new stores a year
The brokerage remains optimistic about the company due to Zudio’s expansion potential, Westside’s steady performance, and Zudio Beauty’s long-term scale-up opportunity.
At the 73rd Annual General Meeting (AGM) held on July 3, Chairman Noel Tata reaffirmed the group’s focus on aggressive expansion: “We are focused on opening 250 stores every year and will exceed this if opportunities arise.” Zudio alone added 220 outlets last year and is expected to maintain that pace this fiscal. Meanwhile, Samoh will add 10 new stores, while Star, Westside, and Utsa will also continue expanding.
The company noted that the gestation period for new stores is under one year—highlighting the efficiency and scalability of its retail model.
2. HSBC revises Trent’s EPS for FY27 and FY28
To fuel its rapid expansion, Trent will invest Rs 10,000–15,000 crore annually for the foreseeable future. HSBC expects the spending to skew toward the higher end of this range. However, this capital intensity has prompted analysts to slightly revise their forecasts.
HSBC has cut Trent’s FY27 earnings per share (EPS) estimate by 1 per cent to Rs 78.34 and FY28 EPS to Rs 99.31, while maintaining revenue and EBITDA projections. The stock’s target price has also been trimmed to Rs 6,600 from Rs 6,700, implying a nearly 7 per cent upside from its July 3 closing price of Rs 6,181.65.
“We maintain our Buy rating, as we continue to see potential in Zudio’s scale-up, Westside’s steady growth, and Zudio Beauty’s optionality,” the brokerage said.
3. Trent debunks fashion fatigue with 200–300 new styles weekly
At the AGM, the company highlighted that Trent continues to defy the notion of fashion fatigue with a robust fast-fashion model. Both Westside and Zudio launch 200–300 new styles every week, helping the brands stay fresh and relevant—especially in Tier II and III cities, where volume growth has remained strong.
Zudio, considered the company’s key growth engine, has even expanded internationally, opening its first store in Dubai and considering four to five additional stores in the region.
4. Star Bazaar emerges as Trent’s next big growth engine
Trent sees significant upside in its hypermarket format, Star Bazaar, which now offers over 70 per cent of its assortment through private labels. These are priced 20–30 per cent below similar national brands.
“Star can be bigger than Westside and Zudio,” the management said. Taking a jab at online competitors, the company added, “Big Basket is more expensive than Star Bazaar,” positioning Star as the go-to option for value-conscious consumers.
5. Indian apparel market to touch Rs 18 trillion by FY28: Trent
While Trent acknowledged the retail market is currently subdued due to geopolitical tensions and inflationary pressures, it remains optimistic about medium- to long-term prospects. “Our growth targets are ambitious, but we believe we’re well positioned to achieve them,” the company said.
The Indian apparel market, valued at Rs 13 trillion in FY25, is expected to grow to Rs 18 trillion by FY28. Trent plans to leverage its strong vendor network, product innovation, and format diversification to capture a bigger slice of this expanding market.
HSBC on Trent: Risks remain
Despite a strong outlook, HSBC flagged potential downside risks such as rising competition in the value fashion space, sustained weak consumer demand, and the possibility that new formats like Samoh or Zudio Beauty may not scale up as expected.
Nevertheless, Trent’s consistent execution, quick break-even timelines, high return ratios, and deepening presence in non-metros—currently home to 584 stores—reinforce the company’s commitment to long-term value creation.