Trent Ltd, one of the most expensive retail stocks in India by valuation metrics, is set to report its March quarter earnings along with a likely bonus announcement, with investors closely watching growth sustainability and margin trajectory.
The Tata Group retail arm has seen a sharp rerating over the past few years, trading at elevated multiples of around 75x FY26 earnings, reflecting strong confidence in its execution, aggressive store expansion, and category dominance through brands like Westside and Zudio. However, growth has slowed in recent quarters.
Brokerages expect Trent to report healthy revenue growth for the March-ended quarter, supported by continued store additions and steady demand.
HDFC Securities estimates revenue growth of about 20% YoY to around Rs 4,940 crore, broadly in line with the company’s pre-quarter update. Motilal Oswal also expects revenue growth of around 18%, driven primarily by store expansion rather than like-for-like growth.
Segmentally, Westside is expected to grow around 26% YoY, while Zudio is seen growing at about 18%, indicating sustained traction in value fashion even as competition intensifies.
Margins are likely to present a mixed picture this quarter. HDFC Securities expects gross margins to expand by around 70 basis points YoY to 43.3%, driven by an improving mix with a higher contribution from Westside. This is expected to translate into an EBITDA margin of around 16.6%, up about 60 basis points YoY.
However, Motilal Oswal takes a more cautious view, building in a 70 basis point YoY contraction in EBITDA margin to 15.3%, citing end-of-season sale (EoSS) pressures and higher operating costs.
The divergence highlights uncertainty around margin sustainability, especially given Trent’s rapid scale-up phase.
Profit may see pressure despite strong revenue growth, as profitability could remain under strain. Motilal Oswal expects adjusted profit after tax to decline around 14% YoY, largely due to margin compression and operating leverage dynamics.
Store additions remain a key growth lever. Trent is expected to add around 22 Westside stores and 111 Zudio stores on a net basis during the quarter, underscoring its aggressive expansion strategy.
Investors will closely track management commentary on demand trends across formats, recovery in same-store sales growth (SSSG), and performance of the Star grocery business.
Trent continues to trade at elevated multiples relative to peers, with a FY26 price-to-earnings multiple of around 75x, moderating to 61x in FY27 and 53x in FY28, according to HDFC Securities. This positions it among the most expensive retail stocks in India, leaving limited room for earnings disappointment.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
