Posted on April 30, 2025, by Niftynews
Trent share price declined sharply by nearly 4% on April 30, 2025, following the company’s fourth-quarter (Q4 FY25) earnings announcement that showed a noticeable slowdown in revenue growth. The stock was trading at ₹5,185.5 on the NSE during early market hours, reacting to the Tata Group firm’s slowest revenue expansion since the COVID era.
Despite a 28% year-on-year increase in revenue to ₹4,217 crore, the pace was a sharp deceleration compared to previous quarters, prompting concerns about sustainability, especially in the face of rising competition and over-expansion risk.
🔍 Key Q4 FY25 Highlights: Growth, But at a Cost
- Revenue: ₹4,217 crore (up 28% YoY)
- Adjusted Profit: ₹318.15 crore (up from ₹128 crore YoY, excluding base quarter one-time gain of ₹543 crore)
- EBIT Margin: Expanded by 100 basis points
- Like-for-like (LFL) Growth: Mid-single digits vs high-single digits in Q3
- Store Additions in FY25:
- 40 Westside
- 244 Zudio
- Store portfolio: 248 Westside, 765 Zudio, 30 other formats
While profit and margins improved, like-for-like growth—a key retail metric—lost steam, raising questions about underlying demand and cannibalisation risks due to aggressive store expansion.
📉 Analyst Reactions: Mixed Sentiment, Lower Targets
Brokerages are divided on what comes next for Trent:
🟢 Morgan Stanley
- Rating: Overweight
- Target Price: ₹6,359
- View: Some hits and misses; Q4 EBITDA beat estimates, but margin pressure due to inventory write-offs is a concern.
🟡 Jefferies
- Rating: Hold
- Target Price: ₹5,900
- Comment: Moderation in LFL growth may disappoint investors. Still expects 35% sales CAGR over FY25–FY28 in base case.
🔻 Nuvama Institutional Equities
- Rating: Buy
- Revised Target Price: ₹6,224 (down from ₹6,662)
- Concerns: Cannibalisation due to hyper-local store saturation and declining LFL growth in the Star grocery format.
These perspectives highlight that while the long-term narrative for Trent remains positive, short-term pressures on profitability and efficiency could limit upside.
🧭 Management Commentary: Focus on Market Density
In a post-earnings filing, Trent said:
“We are consciously increasing the density of our store presence in key micro markets. It’s a strategic shift to deepen market share rather than chase top-line growth at a store level.”
This explains why overall revenue rose while same-store performance slowed. The company appears to be betting on volume over velocity, which could deliver longer-term stability but may dampen near-term excitement.
🔮 What’s Next for Trent Share Price?
Trent has been one of the strongest retail performers post-pandemic, thanks to the breakout success of Zudio and the steady repositioning of Westside as an aspirational yet value-conscious brand. However, current indicators suggest:
🚩 Short-Term Risks:
- Slowing LFL growth
- Cannibalisation from over-clustering
- Margin pressure due to inventory realignments
✅ Long-Term Strengths:
- Aggressive yet controlled expansion
- Brand equity under Tata Group
- Gross margin beat suggests continued cost efficiency
Investors should be prepared for moderate volatility and sideways movement in the near term as the company recalibrates after aggressive growth.
💡 Buy, Sell or Hold?
Buy: If you’re a long-term investor believing in India’s retail growth story and Trent’s execution strategy, current dips could offer a buying opportunity, especially below ₹5,000.
Hold: If you’re already invested and have gains, there’s no immediate need to exit. The structural story remains intact.
Sell: Short-term traders or those uncomfortable with earnings volatility may consider profit booking around current levels.
🧠 Conclusion: Trent Share Price – Temporary Setback or Start of a Slowdown?
The Trent share price drop may look like a red flag, but the fundamentals remain largely intact. While Q4 revenue growth has slowed, the company continues to expand its footprint and protect margins.
Investors should keep a close watch on like-for-like growth in upcoming quarters. If the LFL deceleration continues despite aggressive expansion, concerns around profitability and saturation will grow louder.
For now, buy on dips and hold with caution appears to be the consensus market strategy.
