The share price of Trent is in focus as Goldman Sachs reiterated its Neutral rating with a Rs 4,920 target price, indicating an upside of around 12%. The brokerage, which downgraded the stock to Neutral in July, said current demand conditions in small-ticket discretionary categories remain patchy, yet Trent’s long-term bets on space expansion, automation and a broader brand portfolio could shape its position in the organised apparel market over the next several years.
Goldman Sachs on Trent: Long-term brand depth over short-term ratios
Goldman Sachs said Trent is firmly focused on long-term brand relevance, even when that means absorbing near-term pressure on sales per square foot or short-term cannibalisation inside existing catchments. Management told the brokerage that customer experience matters more than short-lived density metrics. If queues are long and comfort is weak, the customer leaves and that loss hurts more than opening another store nearby or upgrading to a larger space. The company also pointed out that margins have not diluted despite the added space, which reassured the brokerage that the P&L can digest these changes.
The brokerage noted that this stance is not merely defensive. Trent believes a stronger customer experience today creates the base for brand stickiness later, particularly in apparel, where choice is abundant and loyalty is fragile.
Goldman Sachs on Trent: Demand still a mixed bag
The company said demand in small-ticket discretionary categories has been inconsistent for nearly two years. According to Goldman Sachs, management stressed that over any five-year period, demand is never uniform and that “it is wrong to extrapolate trends” solely based on the last 7–8 quarters. Some geographies and customer cohorts are improving, but the overall picture remains mixed.
This uneven backdrop has not slowed the company’s willingness to build for the future. Goldman Sachs said Trent’s expansion plans continue at an appropriate pace, even if near-term sales metrics do not fully reflect the long-term objectives.
Goldman Sachs on Trent: Lower-tier expansion reshapes sales density
A key factor behind lower sales per square foot has been Trent’s push into Tier-2 towns and smaller markets. The brokerage said the company expects lower initial throughput in these regions but trusts the growth runway. Management cited examples where Westside stores in Allahabad and Varanasi, once under Rs 10 crore per store five years ago, have expanded three to four times since then.
Trent added that consumer preferences especially among women are not dramatically different across city tiers, reducing the need for tailoring assortments. Zudio, in particular, has room to move into far more towns than its current footprint, though each new store will experience the typical early-stage density challenges.
Goldman Sachs on Trent: New brands and categories as the next growth engines
Goldman Sachs reported that Trent is working on the next set of growth engines through new brands and categories. The company is especially excited about Burnt Toast, a new format separate from Westside and Zudio. Management said that adding brands is not expensive because the backend infrastructure is shared. They intend to keep betting on new formats, even if only one in ten succeeds every four to five years, because a single proven brand can materially widen the portfolio.
On categories, the company is bullish on beauty. Management argued that product ingredients are often similar across offerings, yet prices vary widely based on branding, which creates an opportunity to make beauty more accessible through sachets and bite-sized packs. They also see potential in lab-grown diamonds, though the category will take longer to mature given Indian preferences for intrinsic value in jewellery, a sentiment that persists even among younger buyers.
Goldman Sachs on Trent: Consumer-led strategy over competitive reactions
Goldman Sachs wrote that Trent does not try to mimic competition. Zudio’s rise to the largest value apparel player was driven by reading consumer shifts quickly rather than copying rivals. Management emphasised that “one cannot control what the competition is doing,” and that consumer preferences change too fast to rely on imitation.
The brokerage noted that while new competitors such as Yousta, StyleUp and InTune are entering the value segment, they have not yet demonstrated strong store economics, which gives Trent more room to scale Zudio.
Goldman Sachs on Trent: Automation gains
Automation has been a quiet but crucial element of Trent’s operating model. Goldman Sachs said the company has invested in automation for nearly three years, and the benefits have become visible only in the last three to four quarters. A key operational detail stood out: Trent now processes roughly ten times the 35–50 million pieces of merchandise it handled five years ago, a scale that management said would have been impossible without automation.
RFID rollout across vendors and warehouses has started to cut store-level employee costs. The brokerage added that more use cases are possible, including self-checkout, though customer preference for assisted checkout in India remains strong.
Goldman Sachs on Trent: Market share ambitions
Goldman Sachs said Trent’s current apparel market share is in the low single digits, but management believes high single-digit or low double-digit share is achievable over time if the company builds a multi-brand portfolio with one or two more growth engines over the next five to seven years. It pointed to global examples such as Zara and Uniqlo, which operate in similarly fragmented markets but still manage significant shares.
The brokerage also noted that two-thirds of India’s apparel market value comes from the top 50 cities. Westside has already emerged as one of the top three to four apparel brands online by volume, and the brand’s average customer age has dropped by about five years in the last half-decade, suggesting widening appeal. The report added that globally around 40% of online apparel and lifestyle orders are returned, a metric relevant to the broader industry context.
Goldman Sachs on Trent: Valuation, forecasts and risks
Goldman Sachs valued Trent using a sum-of-the-parts approach with roughly 98% of the Rs 4,920 target price derived from the standalone business, primarily Westside and Zudio. The standalone operations are valued at 60 times FY30 estimated earnings, discounted back to FY27 at a required return of 15%. The Star business is valued at 2.7 times FY30 sales, also discounted back to FY27, with a 40% discount to Avenue due to potential competition from quick commerce.
The brokerage expects revenue to rise to Rs 2,97,708.9 crore in FY28 from Rs 1,66,681.1 crore in FY25. EBITDA is projected to increase to Rs 53,957.2 crore from Rs 27,452 crore over the same period. EPS is estimated to climb to Rs 76.22 from Rs 44.58. Between FY25 and FY30, Goldman Sachs expects sales CAGR of 20% and EBIT CAGR of 23%.
Key downside risks include rising competitive intensity in value fast fashion, slower-than-expected margin improvement due to cannibalisation, slower maturation of small-town stores and lower store additions than guided. Upside risks include stronger demand recovery, better-than-expected LFL growth and higher gains from automation.
