Expansion, new categories to keep Trent on the growth trajectory

Aggressive store additions, category diversification and an expected recovery in like-for-like growth are expected to support Trent's long-term growth plans

A robust expansion plan, new formats, category diversification, and a projected recovery in like-for-like (LFL) growth are the key positives for retail major Trent. The company stuck to its revenue and profit targets while laying out the expansion road map for each of its major brands at its annual general meeting held on Tuesday.

 

Progress on its targets and its multi-format growth trajectory rubbed off on the stock, which gained 3.3 per cent in trade to ₹3,246 on Wednesday. At the current price, the stock is trading at 87x its 2026-27 (FY27) earnings estimates and 74x its 2027-28 earnings estimates. Its ability to keep the growth trajectory elevated and improve LFL performance will decide the stock movement going ahead.

 

The company has stuck to its 2023 road map of delivering 10x growth in revenues and is on track, with revenue up 2.5x and profit up 3x since then. It has an aggressive expansion plan, which includes adding 50 stores annually of its premium fashion format, Westside. The company added 52 stores in 2025-26 (FY26), while additions between 2022-23 and 2024-25 were 14-18 per year for this format. After adding 52 stores in FY26, the total number of Westside stores has risen to 300 across 97 cities.

 

Annual additions for value fashion retail chain Zudio are pegged at 200-250 (as was the case last year), while those for hypermarket chain Star are at 25-40. The company expects that, over time, there is potential to operate a total of 700 Westside stores (300 in FY26) and 5,000 Zudio stores (963 in FY26).

 

As the revenue growth target cannot be achieved on the basis of just Westside and Zudio, the company is eyeing diversification and new formats to expand its reach across customer segments. In addition to the core brands, it is looking at new formats such as Samoh (occasion and ethnicwear) and Burnt Toast (fast fashion brand), category expansion, and selective growth in international markets.

 

Along with store expansion, the Street will also track LFL performance across its network. The company is eyeing low double-digit LFL growth going ahead after recording single-digit LFL growth in FY26. The weakness last year on this metric was due to new products not performing well, higher store density leading to cannibalisation, and stores performing well in their initial years. The company’s LFL recovered in the fourth quarter (January-March/Q4) of FY26 after multiple quarters of growth deceleration. Channel checks by Motilal Oswal Research suggest that sales decline in cannibalised stores has eased, and LFL recovery is underway.

 

However, Trent’s store productivity could remain under pressure in FY27 as stores added in Tier-II+ markets typically have lower initial productivity and take longer to reach maturity levels compared with metro and Tier-I markets, say analysts led by Aidtya Bansal. Despite relatively weaker growth, Trent maintained strong cost controls to sustain healthy profitability in FY26. Going ahead, the brokerage believes margin expansion would largely depend on the recovery in LFL growth. It has a ‘buy’ rating with an unchanged target price of ₹3,500.

 

HSBC Research points out that the potential numbers for both store formats, especially Zudio at 5,000 stores, are much higher than its estimate of 1,500, though it has maintained its target multiple at 60x price-to-earnings. A higher multiple could be warranted if LFL were to pick up, say analysts led by Nihal Mahesh Jham. The brokerage has a ‘buy’ rating with a revised target price of ₹3,460.