Trent sticks to the long-term goal of growing 25% every year
Tata group-backed Trent Ltd remains committed to the long-term target of growing 25% annually, focusing on brands such as its value fashion format Zudio, opening stores in micro-markets, and expansion into new categories, the retailer told analysts at its investor day.
Trent aims to remain relevant in the fashion business by using Zudio as its primary growth engine, according to reports by multiple brokerages.
It seeks to operate in categories with repeat consumer purchases instead of chasing metrics like like-for-like (LFL) sales growth, store count growth, and total addressable market (TAM), analysts at Nuvama Institutional Equities said in a report released on Thursday following Trent's 18 June investor day meet.
'There is no point driving LFL via discounts or driving price-led growth at the cost of volumes (and losing relevance) or chasing TAM by adding more and more categories. Trent operates under a distinct set of constraints compared to other brands," the report said.
It added that the retailer's commitment to no discounting, maximizing full-price sales, avoiding advertising, and exclusively using private labels significantly narrows its strategic options.
Trent is aggressively pursuing growth, aligning with Noel Tata's vision, which is to grow the retailer 10x its current size. Noel serves as the chairman of both Trent and Tata Trusts.
'Two years ago, I had envisioned that Trent would one day be 10 times bigger. Since then, the revenue run rate has doubled. The headroom for growth remains enormous, and I am confident that we will reach this milestone in the not-too-distant future,' he said in the annual letter to its shareholders earlier this month.
Trent reported revenues of ₹ 17,134.6 crore in 2024-25, up 38.4% year-on-year. Profit for the fiscal year grew 3.85% on-year to ₹ 1,534.41 crore.
Trent operates 1,091 stores as of 31 March 2025.
Zudio, its fast-growing value fashion chain, led the expansion with 244 new outlets, increasing its presence to 765 stores across 235 cities, including its first two overseas stores in 2024-25.
The brand, launched in 2016, crossed a billion in sales after nearly a decade of operations, according to the company's annual filing.
'Zudio has the potential to match Westside's profitability profile over the medium term, given improving unit economics and scale benefits,' Nuvama said in its post-earnings call report.
Westside, the company's lifestyle and apparel brand, ended the year with 248 stores.
Trent's apparel division, which includes brands such as Zudio and Westside, contributed about 80% of the company's overall revenue.
The Tata-backed company is aiming for significant growth in this segment without specifying a timeline.
The stock has rallied by over 700% over the last five years on BSE.
India's overall retail market is projected to grow to $2 trillion within the next decade, up from $820 billion in 2023, according to estimates by Boston Consulting Group (BCG).
In fashion and apparel, Trent's formats compete with the likes of Max Fashion (Landmark Group), V-Mart Retail, Reliance Retail's Azorte, Aditya Birla Fashion and Retail Ltd's Pantaloons, and Style Up, among others.
Trent largely operates in the value-mid priced segment in apparel, footwear, and home goods.
It also operates Zara (fashion retail) and Star (food and grocery chain) stores in India.
Despite a six-fold jump in revenues during FY19-25, management indicated that Trent's share in the country's fashion and lifestyle retail industry remains in low single-digits, analysts at Motilal Oswal Financial Services said.
However, the company believes there is still a 'long runway' for growth and aims to grow at 25% annually over the longer term through a multi-brand, cluster-based approach to increase its market share in key micro-markets, they added.
It is looking to ramp up its presence in categories such as beauty through Zudio Beauty; it recently launched its range of lab-grown diamonds under the brand 'Pome'.
'We continue to like Trent for its robust footprint additions, strong double-digit growth, long runway for growth in Star (presence in just 10 cities), and potential scale-up of new categories,' they said.
The brokerage reiterated a 'buy' rating on the stock while keeping its FY26-27 estimates unchanged.
Meanwhile, Trent remains 'bullish' on the growth opportunity in the food and grocery segment via its Star format but will grow 'sensibly', focusing on the right economics and driving a greater share of its own brands.
Star Bazaar operates via Trent Hypermarket Pvt. Ltd, a joint venture with British retailer Tesco PLC.
Star Bazaar experienced a 25% on-year revenue growth during 2024-25, contributing approximately 15.75% of Trent's consolidated revenue.
This is in contrast to its larger rival, Avenue Supermarts, which operates DMart. Avenue Supermarts generated ₹ 59,358 crore in revenue, with 57.7% coming from food, 20% from fast-moving consumer goods (FMCG), and 22.3% from general merchandise and apparel.
These segments compete directly with Trent's value fashion and daily essentials offerings.
Trent's push comes as DMart faces a slowdown in its food and FMCG segments, which together contribute about 77.4% of the company's overall revenue to rising competition from quick commerce players such as Swiggy, Zomato, and Zepto.
DMart is in the midst of a leadership transition. In February 2026, Anshul Asawa, the designated chief executive, will succeed Neville Noronha.
However, building scale in the Star Bazaar segment would be a 'long-term process', potentially spanning decades, said analysts at Nuvama.
Meanwhile, the company emphasized its focus on prioritizing growth in India and on selling products that customers buy repeatedly.
'Unlike other retailers' obsession with volume, Trent's strategy is rooted in brand equity, customer experience, and staying relevant. The Indian market is a top priority, with most operations and the supply chain rooted domestically, with limited international presence (Zudio in Dubai),' analysts at Jefferies said in a separate report following the investor meet.
Trent is a structural story on the growing organized apparel market in India, they added.
However, expensive valuation keeps us on the sidelines. In the base case, Jefferies expects a compound annual growth rate of 35% in standalone sales over FY25-28E.
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