Trent Shares Rise After Strong Q2 Results and Better Profit Margins

Trent Ltd shares traded six percent higher on Friday after the company reported its Q2FY27 financial results. Like-for-like growth for its fashion portfolio reached mid-single digits during the quarter, showing an improvement from low-single digit growth in the first quarter, even though broader demand trends remain mostly subdued and the festive season shifted to Q3 this year.

Growth And Margins

Standalone Ebitda margin expanded by 99 basis points year-on-year to 18.2 percent, despite elevated inflation and volatile geopolitical conditions. This margin expansion helped Ebitda increase by nearly 30 percent year-on-year, which outpaced the 22.5 percent growth in revenues to 5,788 crore rupees. The Westside format delivered better same-store sales growth, while emerging categories like beauty, personal care, innerwear, and footwear contributed over 21 percent to total revenues.

Store Expansions

Store additions remain a key growth driver, with the company adding 10 Westside and 17 Zudio stores on a net basis during the quarter. About 85 percent of newly opened Zudio stores were located in peripheral growth markets and tier-II cities or beyond. As of 30 September, the company's portfolio included 311 Westside stores, 999 Zudio stores including seven in the UAE, and 32 stores across other lifestyle concepts.

Market Outlook

Broking firm Elara Securities expects a meaningful earnings acceleration in FY28, projecting earnings growth of 25 percent between FY27 and FY29. Meanwhile, ICICI Securities kept an 'Add' rating on the stock with a revised target price of 3,150 rupees, though analysts noted that rising competitive intensity and slower sales growth remain key risks.

Context

Retail companies in India often rely on aggressive store expansion in tier-II and tier-III cities to find fresh growth when metro markets become crowded. Consumer demand during the September quarter is also closely watched because it immediately precedes the peak festive shopping season, when retail spending traditionally spikes across the country.