Trent target prices: What stock analysts say post Q4 results

Trent reported a 56 per cent drop in its March quarter net profit, but analysts largely reported positive on the stock, with target prices ranging anywhere between Rs 5,900 and Rs 6,900, thanks to strong margins and meeting of store addition guidance.  

Nuvama cut its target price on Trent to Rs 6,224 from Rs 6,662, but retained its ‘Buy’ rating on the stock. Morgan Stanley has reportedly suggested 'overweight' on the stock with a target price of Rs 6,359 per share, saying the PAT miss its estimates by 17 per cent on account of losses from associates. Jefferies retained its 'Buy' rating on the retailer and suggested a target price of Rs 5,900.

"Trent's growth rate continues to moderate, though still robust, amid a weak discretionary demand environment. Back-ended strong store additions in Zudio should aid growth in FY26. However, recovery in same store sales growth across fashion and Star formats would be a key near-term monitorables," MOFSL said while suggesting a target price of Rs 6,900 on the stock.

Trent's Q4 profit tumbled 56.24 per cent year-on-year (YoY) to Rs 311.60 crore from Rs 712.09 crore in the corresponding period last year. This is even as the company's revenue from operations climbed 27.87 per cent to Rs 4,216.94 crore from Rs 3,297.70 crore YoY. 

EBIT margin expanded 100 basis points in Q4FY25 even with mid-single digit like-for-like (LFL) growth, lower than high-single digit LFL in Q3FY25, which did not drive operating leverage. 

"The current slowdown in LFL is likely due to a combination of factors: weakening demand, cannibalisation from new stores in same micro-areas, potential over-competition and base effects. Moreover, falling LFL growth in the Star portfolio presents a concern that needs resolution for the format to achieve meaningful scale," Nuvama said.

This brokerage said the absence of any detailed information necessitates its reliance on estimations for a few line items. 

"Our assessment suggests that the Rs 400 crore worth of store sales to franchisees in FY25 led to a significant contraction in rental expenses. The observed dip in revenue likely correlated with a reduction in variable rent. On employee cost our hypothesis is that Trent proactively invested in employee bench strength to support the anticipated rapid network scale-up in FY25. However, the relatively stable employee costs observed over the preceding five quarters, particularly in the context of significant network growth, require clarification," it said.

Building on the FY25 performance and store addition, Nuvama tweaked its FY26E/27 revenue by minus 2 per cent/1 per cent and PAT by minus 9 per cent/minus 11 per cent.