Trent Ltd Share Update: Growth Slowdown, Q4 FY25 Results & Outlook

Trent Ltd, the fashion and lifestyle retailer from the Tata Group operating brands like Westside, Zudio, Star Bazaar, and Utsa, has delivered mixed signals lately. While its Q4 FY25 results showcased strong topline growth, recent guidance for Q1 FY26 and AGM commentary triggered a significant market correction.

📊 Strong Q4 FY25 Performance Marred by Profit Drop

• Revenue surged ~28% YoY to ₹4,217 crore (up from ₹3,298 crore in Q4 FY24).
• However, consolidated net profit plunged ~55% YoY to ₹312 crore from ₹704 crore due to higher SG&A expenses and lower exceptional income.
• Standalone PAT fared better at ₹354 crore, beating estimates, while the board approved a dividend of ₹5 per share.

📉 Growth Guidance Triggers Market Volatility

• At its AGM, management projected 20% revenue growth for Q1 FY26—substantially lower than its 35% CAGR over FY20–25 and its long-term aspirational growth of 25%+.
• Brokerage Nuvama downgraded Trent to “Hold” after slashing FY26/27 revenue forecasts by 5–6% and cutting EBITDA estimates by 9–12%.

💥 Sharp Stock Reaction

• Trent shares dropped ~7–9% in morning trade on July 4, emerging as the top loser on the Nifty 50 index, after management’s cautious commentary.
• Despite the dip, long-term volume and valuation remain strong—Morgan Stanley remains “Overweight” with a ₹6,359 target, while HSBC has initiated coverage with a “Buy” and ₹6,700 target, citing Zudio’s rapid scale-up.

🛍️ Business Highlights & Strategic Drivers

• Zudio continues to expand rapidly, with over 766 stores (including abroad), complemented by 248 Westside and 78 Star Bazaar outlets as of Q1 FY26.
• For FY25, more than 200 new Zudio stores were added, largely in Q4, supporting continued top-line growth.
• Trent was added to the Sensex index effective June 23, 2025, prompting over US$700 million in passive inflows.

⚠️ Risks & What to Monitor Next

• Q1 FY26 Growth Trajectory: Monitoring quarterly updates to see if 20% growth is a short-term blip or marks a new baseline.
• Margin & SG&A Control: Key to bottom-line recovery will be reducing expenses and enhancing operational leverage.
• Zudio & New Formats: Success of growth engines like Zudio Beauty and Star Bazaar will determine long-term growth acceleration.
• Broker Breakevens: Watch whether actual numbers meet or surpass Nuvama’s downward revisions or Morgan Stanley/HSBC estimates.