Trent's Retail Dominance: Bernstein Sets ₹5,000 Target as Zudio & Westside Fuel 20% Growth

Market snapshot: Trent Limited has demonstrated exceptional resilience in FY26, with consolidated revenue crossing the ₹20,000 crore milestone. The company's Q4FY26 performance was marked by a 19.2% YoY revenue surge to ₹5,028 crore, significantly outperforming broader retail sector trends. This growth is underpinned by an aggressive store expansion strategy and improving operating leverage across its core formats.

Summary: Bernstein maintains an 'Outperform' rating on Trent with a ₹5,000 target, driven by a rebound to 20% revenue growth and steady 11% EBIT margins, alongside a major 1:2 bonus issue announcement.

Key Takeaways

• Revenue growth has stabilized at the 20% mark, supported by massive Zudio expansion.
• Board has approved a 1:2 bonus issue and a ₹6 per share dividend for FY26.
• Operating EBIT margins improved to 11.5% in Q4, showcasing strong operating leverage.
• Strategic fundraising of ₹2,500 crore via rights issue or QIP has been greenlit.

SAHI Perspective

Trent’s ability to maintain a 20% growth trajectory on an ever-increasing base is a testament to the scalability of the Zudio model. While the ₹2,500 crore rights issue might dampen near-term stock momentum due to equity dilution concerns, the long-term capital allocation toward the Star business and international Zudio outlets (UAE) suggests a multi-engine growth strategy is taking shape beyond just value fashion.

Closing Insight

Trent remains the gold standard for Indian retail execution; the bonus issue enhances liquidity, while the ₹5,000 target reflects high conviction in its sustainable margin profile.

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