Trent Q4 Preview: Margin Expansion Seen As Store Expansion Drives Sales

Trent is expected to report strong March-quarter growth, supported by continued store additions across Westside and Zudio, with margins also seen improving on scale benefits and a better format mix. The operator of Westside and Zudio stories are set to requit their fourth quarter results on Wednesday.

Bloomberg estimates indicate revenue may rise 18% year-on-year, while Ebitda is seen up 22% and profit up 7%. Ebitda margin is projected to improve to 16.50% from 15.97% a year earlier. The quarter is expected to reflect another period of rapid network expansion, with brokerages pointing to fresh store additions across both key formats.

The key question this quarter is whether Trent can sustain high growth as its store base expands rapidly. Investors will watch same-store productivity, any signs of cannibalisation in Zudio, margin gains from a stronger Westside mix, and the pace of future store additions as the company scales further.

Trent Q4 Preview Key Highlights (YoY, Bloomberg Estimates)

• Revenue seen 18% higher at Rs 4,864 crore versus Rs 4,106 crore
• Ebitda seen 22% higher at Rs 803 crore versus Rs 656 crore
• Ebitda margin seen at 16.50% versus 15.97%
• Profit seen 7% higher at Rs 376 crore versus Rs 350 crore

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Here's what analysts are expecting from Trent Q4 results:

Systematix

• Expects revenue growth of about 20% year-on-year.
• Added 22 Westside stores and 109 Zudio stores in Q4.

HSBC

• Builds in additional quarter-on-quarter store additions for both Westside and Zudio.
• Expects Zudio revenue per square foot to decline year-on-year as new stores cannibalise existing locations, though overall growth remains stable.
• Blended revenue per square foot also expected to decline, though less sharply than in the previous quarter.
• Revenue growth seen improving to about 17%, aided by a favourable base.
• Gross margins expected to improve year-on-year due to a better mix toward Westside.
• EBIT expected to rise about 20% year-on-year.

Citi

• Models net addition of 58 stores in the quarter, including Westside and Zudio.
• Expects revenue growth of about 18% year-on-year.

Morgan Stanley

• Fashion business revenue expected to grow 17% year-on-year, slightly faster than the prior quarter.
• Expects strong net store additions across Westside and Zudio.
• Margins expected to improve year-on-year.

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