Brokerages Divided on Trent After Q3 Results

Trent reported a strong Q3FY26, with standalone net profit up 36% YoY to ₹640 crore (after a one-time ₹26 crore labour law-related charge) and revenue rising 16% to ₹5,259 crore. While cost discipline — especially lower employee costs (-73 bps) due to RFID automation — boosted operating EBITDA margin to 15.2% (up 90 bps), like-for-like sales were weak, dragging growth. Motilal Oswal remains bullish, retaining a ‘Buy’ rating and target of ₹5,200 (30% upside), citing robust store economics, expanding footprint, and potential in Star Bazaar, beauty, and innerwear segments. In contrast, Nuvama Institutional Equities downgraded its target to ₹4,543 from ₹5,189, maintaining a ‘Hold’, arguing for separate valuation of Westside, Zudio, and Star Bazaar formats. It sees limited near-term margin expansion after peak automation benefits. Despite solid execution, Trent’s stock has fallen 24% over six months and 30% in a year, reflecting muted consumer demand and concerns over self-cannibalisation. The divergence in views highlights the debate: long-term growth potential vs. near-term headwinds.