Trent Q4 results: Net profit contracts 47% YoY to ₹350 crore in March quarter, board recommends dividend

Trent Ltd, the retail arm of the Tata Group, reported a sharp decline in its fourth-quarter profit for the financial year 2024-25 (Q4FY25), even as it posted robust revenue growth. The company’s net profit dropped 46.48% year-on-year (YoY) to ₹350 crore for the quarter ended March 2025, compared to ₹654 crore in the same quarter last year.

Despite the bottom-line contraction, Trent’s board has recommended a final dividend of ₹5 per equity share (500%) for its shareholders, underlining management’s confidence in the company’s fundamentals and long-term outlook.

Here’s a detailed look at Trent’s quarterly performance and what it means for investors and the retail sector as a whole.

1. Profit Slumps Despite Topline Surge

The steep YoY decline in profit has caught the attention of analysts and market watchers. While Trent’s revenue surged strongly, the net profit took a hit — indicating margin compression, higher costs, or one-time expenses.

Standalone Financial Highlights – Q4FY25

• Net Profit: ₹350 crore (↓46.48% YoY)
• Revenue from Operations: ₹4,106.10 crore (↑28.8% YoY)
• EBITDA: ₹656.09 crore (↑37.2% YoY)
• Operating Margin: 15.98% vs. 15% YoY

Quarter-on-Quarter (QoQ) Comparison

• Net Profit: ₹350 crore vs. ₹469.33 crore (↓25.44%)
• Revenue: ₹4,106.10 crore vs. ₹4,534.71 crore (↓9.45%)

While revenue rose sharply on an annual basis, it dropped on a sequential basis. This may reflect post-festive season normalization in demand or inventory adjustments.

2. EBITDA and Margins Show Strength

Despite the fall in profit, Trent’s operational efficiency seems intact. EBITDA rose 37.2% YoY to ₹656.09 crore, and its operating margin improved from 15% to 15.98%, indicating that the core retail business remains resilient.

This margin expansion suggests that:

• The company managed to control input and supply chain costs.
• Trent possibly saw higher contribution from premium brands and formats.
• Operational leverage from expanded store footprint and scale effects played a role.

Still, the bottom-line performance indicates either increased depreciation, tax expenses, or other exceptional charges that need deeper scrutiny from analysts.

3. Final Dividend of ₹5 per Share Announced

Trent’s board of directors approved a final dividend of ₹5 per equity share of face value ₹1 each (i.e., 500%). The dividend payout is subject to shareholder approval at the company’s upcoming 73rd Annual General Meeting (AGM).

Key Dividend Details:

• Type: Final
• Amount: ₹5 per share
• Payout Date: On or after the 4th day post AGM conclusion

The dividend announcement underscores the company’s intent to reward shareholders even amid fluctuating quarterly profitability, supported by strong topline growth and improving operational metrics.

4. Trent’s Retail Footprint: A Growth Engine in Motion

Trent operates retail chains like Westside, Zudio, and Utsa, targeting both premium and value fashion segments. The company has been on a strong expansion trajectory, especially with Zudio, which continues to be a major volume driver.

While the company has not shared quarterly store addition numbers in this update, industry observers estimate that:

• Zudio stores now account for over 60% of total stores.
• Trent is focusing on tier-2 and tier-3 markets for expansion.

The strong revenue growth despite a seasonal dip in consumption indicates that Trent’s value-fashion strategy continues to resonate with aspirational Indian consumers.

5. Stock Performance: Off Highs, but Holding Ground

Shares of Trent closed 3.49% higher at ₹5,391.50 on the National Stock Exchange (NSE) on April 29, despite the earnings miss. This shows that investors may have already priced in the profit dip or are betting on long-term structural growth.

Stock Performance Overview:

• 52-week High: ₹8,345 (October 14, 2024)
• 52-week Low: ₹4,052.40 (April 29, 2024)
• YTD Performance: ↓24.31%
• April Month-to-Date: ↑1.25%
• 1-Week Performance: ↓0.28%

Trent’s current market capitalization stands at ₹1.92 lakh crore, making it one of the most valuable players in India’s organized retail sector. While the stock remains far below its 52-week high, the recent rebound suggests some renewed buying interest after the dip.

6. What Could Be Dragging Down Profits?

Though the company did not provide a detailed breakdown in this earnings snapshot, a few potential factors could explain the drop in profit:

• Increased depreciation and amortization from rapid store expansion
• Higher employee or logistics costs
• Muted discretionary demand post-festive season
• Unrealized forex losses or mark-to-market adjustments

It’s also possible that aggressive pricing or promotional activities, especially in value chains like Zudio, affected the net profitability despite topline growth.

7. Analyst Outlook: Margin Resilience is Key

Most brokerage firms are likely to focus on the following metrics when revising their targets or recommendations:

• Gross and EBITDA margin trends
• Per-store profitability
• Pace of store additions, especially Zudio
• Growth in online sales channels

Despite the profit dip, the EBITDA growth and margin expansion are being seen as green shoots. Analysts may downgrade near-term profit forecasts but keep long-term views intact, especially if Q1FY26 shows recovery in bottom-line metrics.

8. Sector Outlook: Retail Recovery Has Pockets of Strength

India’s organized retail sector has seen mixed performance across players:

• Value fashion and essentials-led players like V-Mart and D-Mart have seen volume recovery.
• Premium-focused retailers have faced sluggish growth due to inflationary pressures.
• E-commerce competition remains high but players with strong offline presence like Trent are adapting with omni-channel strategies.

Trent’s strong revenue growth YoY places it among the better performers, but the profit pressure reflects the challenges of operating in a competitive and cost-sensitive environment.

Conclusion: Trent Navigates Profit Pressures with Strategic Focus

Trent’s Q4 results paint a mixed picture. While profit declined sharply, the revenue surge, improved operating margin, and strong EBITDA growth reflect underlying business strength.

The dividend announcement signals confidence, while stock movement post-results shows that the market may be looking past short-term profit dips in favor of long-term growth — particularly from Zudio’s expansion and Trent’s dominant position in the organized retail market.

Investors may need to wait for the full annual report or the Q1FY26 earnings to better assess whether this profit dip was a one-off or the beginning of a longer trend. However, the core retail story for Trent remains compelling, backed by the Tata Group’s deep pockets and a fast-scaling retail footprint.

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