Brokerage firm Bernstein has adjusted its price target for Trent Limited to ₹3,500 while highlighting a strategy to open 50 Westside stores annually. The plan aims to shift the company's earnings mix toward the higher-margin Westside format alongside its Zudio chain.
What Happened
Bernstein has updated its outlook on Trent Limited, a Tata Group retail company, setting a new price target of ₹3,500 per share. The brokerage noted a shift in the company's expansion strategy, which is now heavily focused on scaling its Westside retail format. Management has communicated plans to add approximately 50 new Westside stores each year for the next four to five years. While the target price was adjusted from an earlier level of ₹5,000, the report remains focused on the company’s ability to drive long-term profitability through this targeted expansion.
The Shift Toward Westside
For several years, the market focus on Trent was largely driven by the aggressive growth of its value-fashion chain, Zudio. Bernstein’s analysis suggests that the company is now balancing this with a significant push into the Westside format, which offers a different product mix. In the 2026 financial year, Westside added 52 stores, a figure that exceeded expectations and surpassed the total store additions from the previous three years combined. This change indicates a move toward more sustainable, high-margin growth.
Why Product Mix Matters
Investors often pay close attention to the profit margins of retail companies. Westside operates with gross margins exceeding 55%, which is significantly higher than the approximately 40% margin typically associated with the Zudio format. By prioritizing Westside’s expansion, Trent aims to improve its overall earnings quality. Bernstein has increased its earnings per share estimates for the company by about 2%, reflecting confidence that this format mix will contribute positively to future profitability.
Store Strategy and Competitive Context
Beyond the number of stores, the company has focused on geographic efficiency. The recent strategy involved exiting underperforming markets and closing weaker stores, a process described as store rationalization. New store openings are now concentrated in India’s top 100 cities, aiming to improve density within specific areas rather than spreading too thin across too many locations. When compared to peers like Shoppers Stop, which added 15 net stores between FY23 and FY26, Trent’s addition of 86 net stores for Westside highlights a different pace of execution.
Risks and Monitoring
While the expansion plan is ambitious, investors typically monitor several factors in retail rollouts. The success of this strategy will depend on the company's ability to maintain high productivity in new stores without creating too much competition between its own locations in the same city. Additionally, since the retail sector is highly sensitive to consumer spending patterns, maintaining consistent demand is essential for sustaining margins. Future updates on store opening timelines, actual footfall, and how the company manages the cost of these new additions will be key areas to track.