Trent: Outperforming peers, yet momentum moderating on high base; buy or sell?

Trent share price today: Shares of Trent Ltd fell over 3 per cent in Tuesday’s trade after the Tata Group company released its September quarter business update, which indicated steady growth on a high base. Antique Broking highlighted that while Trent continues to outperform its peers, the growth trend appears to be moderating due to the elevated base.

The domestic brokerage feels Trent is well-positioned to navigate the competitive business environment in the medium to long term and that its foray into the Gen-Z demand through its brand Burnt Toast (BT) is a positive development, indicating to management’s focus on tapping into evolving fashion trends. 

"We maintain our positive stance on Trent with a Buy recommendation at a target of Rs 7,031 based on SoTP valuation on 1HFY28 estimates," Antique said. On Tuesday, the scrip was trading 3.41 per cent lower at Rs 4,608.05.

Trent on Monday said its standalone revenue for the September quarter grew 17.4 per cent YoY to Rs 5,000 crore. The company added 40 net new stores of Zudio and 13 net new stories of Westside
during the quarter, taking the total to 806 and 261 stores, respectively. 

A majority of the Westside stores were turned operational during September, which would contribute to revenue in the coming quarters, Antique said. As per its understanding, Westside will be a key focus area for Trent as the company has added 13 stores in H1 against 14-18 annual additions during the last three years. It believes Trent would maintain the pace of store addition for Zudio and accelerate Westside’s store expansion. 

"We believe Trent is focused on scaling its organic brand portfolio, allowing for better
operational control. Management’s continued focus on enhancing store experience, improving
profitability, and return ratios, while scaling up operations, reflects a disciplined approach.
We maintain our positive stance on Trent with a Buy recommendation and a target priec of Rs 7,031 based on SoTP valuation on 1HFY28 estimates," Antique said.

On Burnt Toast, Antique said BT’s positioning towards the fashion-forward youth, who are the trendsetters and style bearers, could provide synergies to designers across the three formats. 

It said the format’s expansion will be gradual in the near term and aggressive expansion will depend on its success, similar to Zudio’s growth story.