Is Westside the new Zudio? That's the question Bernstein analysts Jignanshu Gor and Parth Shah put at the centre of their latest note on Trent Limited, and it's a question that would have sounded strange even a few months ago. For three years, they say, the story of Trent has been the story of Zudio. Westside, the company's original department store format, had faded into the background.
That changed at Trent's recent annual general meeting, where management guided for roughly 50 new Westside stores a year, a sharp jump for a chain that opened just 48 stores across the previous three years combined before an unexpected 52 additions in FY26 alone.
The Target Cut
Bernstein trimmed its price target on Trent to Rs 3,500 from Rs 5,000, while keeping its Outperform rating. The cut owes largely to Trent's recent bonus share issue, which expanded the share count and mechanically lowered per-share estimates even as the business outlook improved. FY27 and FY28 EPS estimates now stand at Rs 43.61 and Rs 53.82, down from Rs 65.33 and Rs 78.83 previously.
Using its store-location database, Bernstein tracked Westside's openings from FY24 through FY26 and found three things:
- Store rationalisation in weaker cities appears largely complete
- New additions are concentrated in India's top 100 cities
- Unlike Zudio's aggressive pincode-level push, Westside's density growth has been measured, with store density per 100,000 people holding flat over the past six months.
Basis this, Bernstein sees 50 stores a year as achievable for the next four to five years, taking Westside to roughly 500-550 stores. Rival Pantaloons runs a larger network of around 400 stores but is guiding for just 20 additions annually.
Even before this acceleration, Westside had outgrown peers like Lifestyle and Shoppers Stop, aided by financial troubles at rival chains. Only 5% of Westside stores lack a competitor in the same city, but 41% face no rival in the same pincode, suggesting the brand is opening where others can't or won't.
Does This Change the Thesis?
Westside's share of Trent's revenue has held steady above 40% even as Zudio scaled rapidly, so a stronger Westside reinforces the investment case.
The revised outlook lifted Bernstein's three-year revenue growth estimate to around 21% annually. Westside's fatter gross margins, above 55% versus roughly 40% for Zudio, nudged profit estimates up by about 2%. Bernstein raised its target P/E multiple to 65x FY28 earnings from 63x.
Bernstein flagged rising competition from global entrants like Shein or Primark, a potential slowdown in store openings, and continued weakness at Star, Trent's supermarket chain, which could weigh on the company's overall valuation.
ALSO READ: From Westside To Zudio: A Look At Noel Tata's Retail Playbook As He Preps For Trent Exit
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.