TRENT

’s Aggressive Store Expansion Supports Earnings Outlook

delivered a margin beat in Q3FY26, despite revenue growth moderating to 16% YoY due to early festive season, GST transition effects, and subdued apparel demand. Operating efficiencies and leverage drove EBITDA margin expansion of ~200 bps YoY, while net earnings (ex‑exceptionals) surged 42% YoY. With aggressive store expansion across Westside and Zudio, improving consumer sentiment, and sustained margin strength, Trent’s medium-term earnings outlook remains robust. Financial Performance - Revenue growth: 16% YoY, impacted by festive timing and GST transition. - Gross margins: Stable. - EBITDA margin: Expanded ~200 bps YoY, beating expectations. - Net earnings (ex‑exceptionals): +42% YoY. - Exceptional charge: ₹26 crore, linked to labour code provisions. Store Expansion & Network Growth - Westside: Added 17 stores, total 278. - Zudio: Added 48 stores, total 854. - Combined store count: +30% YoY; retail area expanded 39% YoY to 15.7 mn sq. ft., reflecting larger-format stores. - Expansion strategy: Entering new cities/towns and deepening presence in Tier 1 & 2 catchments. - Zudio: ~75% of new stores in 9MFY26 opened in new locations, highlighting rapid geographic diversification. Category & Digital Growth - Emerging categories (beauty, personal care, innerwear, footwear): 21% of revenues, up 100 bps YoY. - Westside digital business: Grew 38% YoY, supported by Tata Neu platform. - Westside registers among the highest online volumes versus peers. Operational Strength - Cost optimisation and automation initiatives improved manpower productivity. - Cluster-level revenues and profitability rising in Tier 1 & 2 cities. - Margin improvement expected to sustain, aided by scale efficiencies and technology investments. Valuation & Outlook - Strong earnings delivery and steep underperformance set stage for potential re-rating. - Valuation: Sum-of-the-parts suggests 21% upside from current levels.