Trent Q1 Review — Dolat Capital Maintains 'Add', Says Rich Valuations Leave Limited Room To Err

Trent continues to deliver a compelling growth story, led by Westside and strong traction of Zudio. Its consistent execution, efficient supply chain, and curated merchandise highlight a strong competitive edge, while calibrated forays into adjacencies like Star provide optionality for future growth, positioning it as a long-term compounder.

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Dolat Capital Report

Trent Ltd.'s Q1 FY26 revenues were weak for fourth quarter partly offset by healthy margins on lower opex. Standalone Q1 FY26 revenue/gross profit/Ebitda/adjusted profit after tax grew by 20/17/37/24% YoY.

Trent continues to deliver a compelling growth story, led by Westside and strong traction of Zudio. Its consistent execution, efficient supply chain, and curated merchandise highlight a strong competitive edge, while calibrated forays into adjacencies like Star provide optionality for future growth, positioning it as a long-term compounder.

However, rising competition, consumption slowdown, cannibalization in key metros and expansion in Tier II and III cities is moderating growth. Rich valuations leave limited room to err.

We maintain our estimates and factor revenue/Ebitda/APAT CAGR of 24/30/27% over FY25-27E.

Reiterate ‘Accumulate’ rating with unchanged SOTP-based target price of Rs 5,825 (75x FY27E standalone EPS, Zara at 20x EV/E and Star at 5x EV/S).

Trent trades at ~46/37x FY26/27E standalone EV/E and 87/69x PE (adjusted for Star / Zara).

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