TRENT - Trent

📊 NSE: TRENT 🏢 Trading 📅 Last Updated: 12/14/2025 14:32

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 37% YoY to INR 17,353.17 Cr in FY25. The Fashion and Lifestyle segment (Westside and Zudio) drove growth with a 10% Like-for-Like (LFL) growth in FY24 and continued double-digit LFL in FY25. Star (grocery) revenue grew 24.2% from INR 2,832 Cr in FY24 to INR 3,517 Cr in FY25. Zara reported revenue of INR 2,769 Cr in FY24, representing 8.5% YoY growth.

Geographic Revenue Split

The company operates primarily in India with a presence in 2 cities in the UAE as of Q2 FY26. Specific percentage splits by Indian regions are not disclosed, but the company added 220 Zudio stores and 16 Westside stores in FY25 to expand its pan-India footprint.

Profitability Margins

Gross margin remained steady at approximately 43.6% (COGS was 56.42% of net sales in FY25 vs 55.58% in FY24). PAT margin was 8.5% in FY25 compared to 10.9% in FY24; however, FY24 PAT included a one-time exceptional gain of INR 576.07 Cr from lease reassessments. Standalone PAT for FY25 was INR 1,584.84 Cr, up 10.4% from INR 1,435.82 Cr in FY24.

EBITDA Margin

Operating EBITDA margin (OPBDIT/OI) improved by 20 bps to 16.1% in FY25 from 15.9% in FY24. This improvement was driven by economies of scale from rapid store expansion and improved sales per sq ft, which rose to INR 16,378 in FY25 from INR 15,776 in FY24.

Capital Expenditure

Annual capital expenditure is estimated between INR 1,200 Cr and INR 1,300 Cr for FY25 and FY26, primarily dedicated to store network expansion and backend infrastructure. Capex is largely funded through internal accruals and healthy cash flows from operations (INR 1,728 Cr in FY25).

Credit Rating & Borrowing

The company maintains a strong credit profile with an interest coverage ratio of 19.9x in FY25 (up from 5.4x in FY24). Total debt includes Non-Convertible Debentures (NCDs) of INR 499.2 Cr due in May 2026. Borrowing costs are low as the company has not utilized its INR 350.01 Cr fund-based working capital limits.

⚙️ Operational Drivers

Raw Materials

Finished apparel and lifestyle goods (100% private labels for Westside) constitute the primary cost, with Cost of Goods Sold (COGS) totaling INR 9,261.55 Cr in FY25 (56.42% of net sales).

Import Sources

Sourcing is primarily domestic through a network of external suppliers and vendors, though specific countries are not listed. The company emphasizes 'responsible sourcing' and vendor compliance with the Trent Code of Conduct.

Key Suppliers

Specific supplier names are not disclosed; however, the company utilizes an 'outright purchase' model for inventory rather than 'Sale or Return' (SOR), placing the inventory risk entirely on Trent.

Capacity Expansion

As of September 30, 2024, the company operated 831 stores. In FY25, it added 220 Zudio stores and 16 Westside stores. Zudio's rapid expansion is a key driver, having added 203 stores in FY24 alone.

Raw Material Costs

COGS increased 41.6% YoY to INR 9,261.55 Cr in FY25, slightly outpacing revenue growth of 38%, leading to a marginal increase in COGS as a percentage of sales from 55.58% to 56.42%.

Manufacturing Efficiency

Manufacturing is outsourced; however, retail efficiency is measured by Sales per Sq Ft, which improved 3.8% to INR 16,378 in FY25. Operating ROCE (excluding IndAS 116) improved to 37% in FY25 from 33% in FY24.

Logistics & Distribution

Logistics costs are managed through centralized warehousing; the operating cycle improved to 27 days in FY25 from 30 days in FY24, indicating faster movement of goods to stores.

📈 Strategic Growth

Expected Growth Rate

60%

Growth Strategy

Growth is driven by the rapid scaling of the Zudio format (value fashion) and Westside (lifestyle). The strategy involves accelerating store expansion in attractive micro-markets, enhancing digital reach via Westside.com and Tata Neu (online revenue is ~6% for Westside), and refining the 'Star' hypermarket model. The company focuses on 100% own-brand offerings to maintain high margins and differentiation.

Products & Services

Branded apparel, footwear, accessories, beauty products, and grocery/hypermarket retail services.

Brand Portfolio

Westside, Zudio, Star, Samoh, Utsa, Misbu, Zara (JV), and Massimo Dutti (JV).

New Products/Services

Expansion into 'Zudio Beauty' and 'Samoh' (ethnic wear) are new growth levers. Samoh and Zudio International are expected to contribute to future revenue as they scale beyond initial pilot phases.

Market Expansion

Targeting pan-India expansion with a focus on micro-markets and international entry (UAE). The company added 236 net stores across formats in FY25.

Market Share & Ranking

Trent is a leading organized retail player in India; while specific market share % is not cited, it is noted as a top-tier competitor to Shoppers Stop and Aditya Birla Fashion.

Strategic Alliances

Joint Venture with Tesco PLC for Star Bazaar (Trent Hypermarket Pvt Ltd) and a JV with Inditex for Zara and Massimo Dutti.

🌍 External Factors

Industry Trends

The Indian retail industry is shifting toward organized 'value fashion' (growing at 20%+). Trent is positioned to capture this through Zudio. Digital integration (omnichannel) is the future direction, with Trent targeting increased contribution from Tata Neu.

Competitive Landscape

Key rivals include Shoppers Stop, Lifestyle International, Aditya Birla Fashion (Pantaloons), and online giants like Amazon, Flipkart, and Myntra.

Competitive Moat

Moat consists of the 'Tata' brand trust, a 100% private label portfolio (higher margins/control), and a proven ability to scale the Zudio format profitably. These are sustainable due to deep supply chain integration and prime real estate access.

Macro Economic Sensitivity

Highly sensitive to GDP growth and inflation as 80%+ of revenue comes from discretionary fashion retail. Inflation in textile inputs can impact COGS (currently 56.42% of sales).

Consumer Behavior

Shift toward value-conscious yet trendy fashion is benefiting Zudio. Increasing digital penetration is driving the 6% online revenue contribution for Westside.

Geopolitical Risks

Minimal direct impact, though global supply chain disruptions could affect the availability of certain raw materials or international brand JVs like Zara.

⚖️ Regulatory & Governance

Industry Regulations

Complies with National Guidelines for Responsible Business Conduct (NGRBC) and labor standards across its vendor network. Subject to local municipal regulations for store operations.

Environmental Compliance

Trent follows the Tata Climate Change Policy, focusing on energy waste management and product stewardship (recycling). Specific compliance costs in INR are not disclosed.

Taxation Policy Impact

Effective tax rate was approximately 23.7% in FY25 (INR 491.78 Cr tax on INR 2,076.62 Cr PBT).

Legal Contingencies

The company notes that actual results may differ due to judicial pronouncements and changes in government regulations, but no specific high-value pending court cases were quantified in the documents.

⚠️ Risk Analysis

Key Uncertainties

Store cannibalization risk as Zudio and Westside expand in the same micro-markets. Continued losses in subsidiaries like Booker India (INR 28 Cr loss in FY24) and Star JV (INR 94.39 Cr loss in FY24) could impact consolidated profitability.