Amid a mixed Q4FY25 earnings season for discretionary retail, Trent emerged as a standout, not only for its continued topline growth but for how it drove it—through operational efficiency and value-focused execution. According to Nuvama, a key trend among a few discretionary companies in Q4FY25 was their focus on cutting cost and improving operating leverage to drive value-driven growth and this approach was evident at Trent in the apparel sector.
During the quarter in review, the Tata-owned retailer, known for its brands Westside and Zudio, doubled down on operational efficiency and stood out among peers in the apparel sector by prioritising sustainable growth levers over short-term top-line acceleration.
The brokerage firm said that apparel companies delivered mixed results this quarter, with value retailers leading the pack.
Strategic expansion amid cautious growth
Trent’s topline growth in Q4FY25 remained strong, although the pace moderated compared to earlier quarters. This was mainly due to store overcrowding in urban areas, which affected same-store sales. However, better service and improved operations helped balance this out, showing a shift toward more efficient, steady growth.
Trent continued to double down on Zudio, its value retail format, aggressively expanding its footprint across India. These new store additions aligned with earlier guidance, helped the brand strengthen its hold in the affordable fashion segment.
While the growth in number of Zudio stores contributed in diluting Trent’s overall gross margins, given its inherently lower price point compared to Westside, it underscores a deliberate strategic tilt toward high-volume, low-margin growth aimed at mass-market dominance.
Strong growth amid headwinds
Despite external pressures such as demand softness in regions like Telangana and a shorter winter season impacting seasonal apparel categories, Trent reported robust growth supported by productivity gains and a tighter grip on cost structures. Although the pace of growth is slowing down. Inventory management, employee efficiency, and logistical streamlining all contributed to the improved profitability, Nuvama said.
According to the analysis report, the company’s ability to extract more value from existing resources has become a defining theme. While gross margin took a hit due to an extended End of Season Sale (EOSS) and the growing share of Zudio, EBITDA margins were sustained through lean operations and store-level productivity enhancements.
Trent reported contraction on account of a one-off lease accounting adjustments in the base quarter; barring that, Nuvama said, the growth would have been around 46 per cent YoY.
Others vs Trent
In terms of store additions, Nuvama said that most companies executed on their guidance. Key positive outliers included: i) Trent, led by aggressive Zudio store openings; ii) V2 Retail, expanding on a relatively low base; iii) Style Bazaar, continuing expansion in line with IPO plans; iv) Kewal Kiran, leveraging the franchise model for growth; and v) Shoppers Stop, scaling up its value retail format Intune (behind schedule though).
On the other hand, according to Nuvama, key negative outliers were: i) Vedant Fashions, which undertook significant store rationalisation; and ii) ABFRL, which rationalised stores across its brand portfolio, including both Madura (ABLBL) and Pantaloons.
Compared to its peers, Trent continued to stand out with resilient topline growth and stable margins, even as the pace moderates. Brands like Manyavar and Shoppers Stop struggled with lower productivity and margin pressures. KKCL and Vedant Fashions witnessed dented profitability by non-core factors like reduced other income or tax adjustments. Alongside other value fashion players such as V-Mart and Vishal Megamart, which benefited from sustained demand, Trent has managed to strike a balance between scale and efficiency, reinforcing its position as a leader in value-driven growth within the discretionary retail space.