Trent Aspires To Grow 25%+ Through Higher Revenue Share, Says Motilal Oswal Maintaining 'Buy'

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Motilal Oswal Report

Trent Ltd.’s growth rate has moderated in the last few quarters, though still robust, amid a weak discretionary demand environment.

Back-ended strong store additions in Zudio should aid growth in FY26. However, recovery in same-store sales growth across fashion and Star formats would be a key near-term monitorable.

We continue to like Trent for its robust footprint additions, strong double-digit growth, long runway for growth in Star (presence in just 10 cities) and potential scale-up of new categories (beauty, and lab-grown diamonds).

Our FY26-27 estimates are unchanged. We build in FY25-27E CAGR of ~25-26% in standalone revenue/Ebitda/PAT, driven by the continuation of robust area additions in Zudio.

We assign 55x Mar’27E EV/Ebitda to the standalone business (Westside and Zudio; a premium over our Retail Universe, given Trent’s superlative growth), 2.5x FY27E EV/sales to Star joint venture, and ~7x EV/Ebitda to Zara JV to arrive at our unchanged target price of Rs 6,900. Adjusting the value of Star and Zara, the stock is trading at 77x FY27E PE for the standalone business (vs ~90x long-term average 1-year forward PE).

We reiterate our Buy rating.

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