Trent Q3FY26 results trigger mixed brokerage calls on growth, margins

Brokerages remain divided on the outlook for Tata Group’s Trent after the fashion and lifestyle retailer announced its financial results for the third quarter of FY26 (Q3FY26).

 

Analysts at Antique Stock Broking remain bullish and have maintained their Buy rating, citing sustained growth, cost efficiencies and strong momentum in its lifestyle brands. Centrum Broking, meanwhile, has retained a Neutral rating, acknowledging margin improvement but flagging concerns around demand trends, the fashion portfolio and continued underperformance at the Star format.

 

Both brokerages, however, agree that Trent continues to grow steadily, expand its store network and improve profitability, broadly in line with expectations. This comes despite some near-term moderation in demand owing to festive timing shifts and cautious consumer sentiment.

 

The commentary follows Trent’s Q3FY26 performance, wherein the company reported a 3.1 per cent year-on-year rise in consolidated net profit to ₹512.8 crore for the October–December quarter. Profit before interest, depreciation and tax rose 22.1 per cent year-on-year to ₹1,099.9 crore. Revenue from operations increased 14.8 per cent to ₹5,345.1 crore during the quarter.

Antique Stock Broking: Retains Buy | Target price ₹4,792

Analysts at Antique have retained their Buy rating on Trent, revising the target price to ₹4,792 from ₹5,700 earlier, citing moderating revenue growth. The brokerage said the company’s Q3FY26 performance was broadly in line with expectations.

 

Westside remains a focus area, with 17 new store additions during the quarter, while Zudio added 48 stores. Antique noted that Q3 performance was also impacted by the GST transition and a shift in consumer preference towards higher-ticket items. The brokerage expects demand for small-ticket discretionary lifestyle products to improve over the medium term.

 

“Profitability continues to improve, with a 194 basis points year-on-year Ebitda margin expansion, driven by cost optimisation through automation-led productivity gains such as RFID. Given strong cost optimisation and sustained growth in lifestyle brands, we maintain our Buy recommendation,” Antique said in its report.

 

Antique has moved to a sum-of-the-parts valuation based on FY28 estimates, assigning 40x pre-Ind AS EV/Ebitda to the standalone business.

 

The brokerage expects sales and pre-Ind AS Ebitda to grow at a CAGR of 19 per cent and 23 per cent, respectively, over FY25–28E, driven by scaling of the organic brand portfolio, focus on enhancing store experience, disciplined profitability improvement and exploration of emerging categories such as Burnt Toast, which caters to Gen Z consumers.  ALSO READ | Bajaj Finance down 2% on higher provisions; brokerages optimistic on growth

Centrum Broking: Retains Neutral | Target price ₹4,500

Centrum Broking has retained its Neutral rating on Trent, with a target price of ₹4,500 per share. The brokerage said Trent’s Q3 results were in line on the topline, with a clear beat on margins.

 

“Sequentially, the company has exited the 40–50 per cent growth run-rate window. Growth decelerated due to marginally negative like-for-like growth in the fashion portfolio, which accounts for around 79 per cent of revenue, led by a preponed festive season and weak consumer sentiment. Store additions remained healthy, with 17 Westside, 48 Zudio and two Star stores added in Q3FY26,” the brokerage said.

 

Centrum further highlighted management’s emphasis on selecting micro-markets and catchments in Tier II and Tier III geographies to expand total addressable market and gain market share. It noted that 75 per cent of Zudio stores added in 9MFY26 were located in these regions.

 

The brokerage added that the Star format posted its second consecutive quarter of year-on-year de-growth, driven by stress in GM&A, a high base effect and rising competitive intensity from both legacy players and new-age quick-commerce platforms.  ===================================================== 

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