Trent jumps 7% as Q2 profit rises 25%, beats estimates

Limited (TRENT) rose 7% to ₹3,059 on October 30, against the previous close of ₹2,866, after its Q2 FY27 results beat estimates. It was the top gainer on both the Sensex and Nifty. Consolidated net profit rose 25.3% year-on-year to ₹468.09 crore, announced after market hours on October 29. Consolidated revenue grew 22% to ₹5,873 crore, and operating EBITDA jumped 37% to ₹785 crore. The operating EBIT margin expanded to 11.6%. Zudio crossed 1,000 stores during the quarter, and the Star grocery business grew revenue more than 20%. Citi said revenue and EBITDA were 4% and 1% above its estimates. Elara Securities upgraded the stock to Buy with a ₹3,600 target. Analysts are rewarding two things: margin resilience in an inflationary environment, and a recovery in like-for-like growth to mid-single digits. Operating profit growing well ahead of revenue shows the business is getting more efficient as it scales. The bottom line is weaker than the headline. Standalone adjusted profit rose only 9% to ₹490 crore, even though standalone operating EBITDA grew 37–38%. So most of the operating gain is being absorbed by store-related costs such as depreciation and lease charges as Trent opens more stores. Retail area also grew 26%, ahead of 23% standalone revenue growth, which means sales per square foot are not keeping pace with expansion. Mid-single-digit like-for-like growth is a recovery, but it is modest. Investors should watch like-for-like growth trends, standalone profit growth, revenue per square foot, and Zudio’s store economics as it scales past 1,000 outlets. The key question is whether Trent can turn strong operating growth into equally strong bottom-line growth. Disclosure: I do not hold any position in Trent Limited. This post is for informational purposes only and is not investment advice.