Tata Group’s Trent share price slipped about 3% in early trade on April 23. The decline comes even as recent quarterly numbers showed strong operating performance, leaving brokerages divided between near-term caution and long term optimism.
The company reported a solid March quarter, driven by store additions and margin gains, but commentary around demand and cost pressures has kept expectations measured. Brokerage firms tracking the Tata Group retailer say the stock is now at a point where earnings strength is visible, though valuation and consumption trends will decide the next move.
Jefferies on Trent: ‘Hold’
Jefferies has maintained a ‘Hold’ rating on Trent with a target price of Rs 4,675, implying an upside of about 6% from current levels. The brokerage noted that standalone revenue rose to Rs 4,936.6 crore in 4QFY26 from Rs 4,106.1 crore in 4QFY25, marking a 20% growth year on year, while EBITDA came in ahead of estimates, supported by operating leverage.
The firm pointed out that EBITDA increased to Rs 919 crore in 4QFY26 from Rs 656.4 crore in 4QFY25, translating into a 40% rise year on year. Margins improved as gross margin expanded to 44.3% in 4QFY26 from 42.6% in 4QFY25. However, sequential softness was visible, with revenue easing compared to the December quarter.
Jefferies said growth continues to be led by store expansion, especially in the value format Zudio, with over 80% of new stores opening in smaller cities and emerging markets. It added that the company is focusing on increasing density in key markets while building presence in tier two and tier three locations.
“Consumer sentiment was broadly stable at the start of the quarter, but the impact from evolving geopolitical situation is still unfolding and consumers are spending cautiously,” the brokerage said.
The report also flagged cost pressures, noting that certain raw materials are seeing inflation while labour availability remains uneven across regions. Despite this, margin expansion has held up, supported by internal efficiencies and scale benefits.
Jefferies expects standalone sales to grow at a compound annual growth rate of about 23% between FY26 and FY29, with EBITDA margins improving gradually over the same period. Still, it believes current valuations already capture much of this growth, which keeps the rating unchanged.
Motilal Oswal on Trent: ‘Buy’
Motilal Oswal has reiterated a ‘Buy’ rating on Trent with a target price of Rs 5,250, suggesting an upside of about 18%. The brokerage said the March quarter performance stood out across metrics, driven by strong execution and margin expansion.
According to the report, revenue for the quarter came in at Rs 4,936.6 crore, up 20% year on year, supported by recovery in like for like growth and continued store additions. EBITDA rose sharply to Rs 919 crore from Rs 656.4 crore a year ago, while EBITDA margin expanded to 18.6% from 16% over the same period.
Motilal Oswal noted that gross margin expanded by about 170 basis points year on year, aided by a better mix and improved contribution from Westside store additions. The brokerage also pointed to disciplined cost control, which helped drive profitability beyond expectations.
“After several quarters of deceleration in growth rate, revenue growth picked up as like for like growth recovered and store additions remained strong,” the firm said.
For the full year FY26, the brokerage highlighted that revenue increased to Rs 1,97,000 crore from Rs 1,66,681 crore in FY25, reflecting an 18% rise, while EBITDA climbed to Rs 36,433 crore from Rs 27,540 crore, supported by margin gains. Adjusted profit also grew at a healthy pace.
The report noted that expansion remains a key driver, with 122 net store additions during the year, taking the total fashion store count to 1,286. Zudio alone added 109 stores during the March quarter, underscoring its role as the growth engine.
Motilal Oswal expects earnings to continue growing, with a compound annual growth rate of about 21% in revenue and 22% in EBITDA between FY26 and FY28. It also sees further margin gains, driven by operating leverage and scale benefits.
“Despite relatively weaker growth, the company continues to display strong cost controls to report healthy profitability,” the brokerage said.
Nuvama on Trent: ‘Hold’
Nuvama has retained a ‘Hold’ rating on Trent with a target price of Rs 4,416, implying a potential upside of around 3% to 8% depending on valuation assumptions. The brokerage noted that earnings were supported by margin gains, though demand conditions remain mixed.
The firm said standalone revenue grew to Rs 49.37 billion in 4QFY26 from Rs 41.06 billion in 4QFY25, reflecting a 20% increase, while EBITDA rose 40% year on year. Gross margin expansion and operating leverage were key contributors to this performance.
Nuvama pointed out that fashion concepts continued to perform well, with like for like growth improving sequentially, while grocery operations saw steady traction led by private label growth. It also highlighted that cost optimisation measures and automation have supported margins.
“Management indicated that near term demand conditions remain cautious with consumer spending moderating amid ongoing macro uncertainties,” the brokerage said.
The report also mentioned that input costs for raw materials have seen inflationary pressure, while labour availability remains uneven, which could weigh on margins going ahead. At the same time, it expects productivity improvements to partly offset these pressures.
Nuvama expects EBITDA margins to improve gradually, supported by efficiencies and scale, though it has trimmed valuation multiples to reflect slower growth expectations. It believes expansion will continue, but earnings upgrades may be limited in the near term.
Conclusion
Trent’s recent correction comes at a time when its operating performance remains strong but the outlook is not without concerns. Brokerages agree that the company is executing well on store expansion and margins, yet they also point to cautious consumer demand and rising costs.
Disclaimer: The stock performance, brokerage ratings, and price targets mentioned are for informational purposes only and do not constitute an offer or solicitation to buy or sell securities. Investments in the equity market are subject to market risks; please consult a SEBI-registered investment advisor before making any financial decisions based on this report. The views expressed by institutional brokerages are their own and do not reflect the editorial stance of this publication.
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