Brokerages Motilal Oswal and Morgan Stanley have increased their target prices for Trent Ltd., citing the retailer's aggressive store expansion plans. The company, which posted a 32% profit jump in the March quarter, plans to raise ₹25 billion to boost warehousing and technology.
What Happened
Trent Ltd. has received positive commentary from major brokerages, Motilal Oswal and Morgan Stanley, following its recent operational updates. Motilal Oswal has kept a 'Buy' rating with a price target of ₹3,500, while Morgan Stanley maintained an 'Overweight' stance with a target of ₹3,151. These reports reflect confidence in the retailer's ability to maintain high growth rates through its core business formats, specifically Westside and Zudio.
The Expansion Strategy
At the core of the brokerage optimism is Trent’s aggressive plan to add new stores. The company is betting heavily on its 'value fashion' format, Zudio, aiming to scale up to 5,000 stores in the long term, a massive increase from the roughly 963 stores operating in FY26. Westside, its premium apparel brand, is also set for expansion with an annual target of 50 new stores, aiming for a total network of 700 locations.
Analysts also highlighted a potential turnaround for the Star supermarket business. After a period of recalibration, the company expects to open 25 to 40 Star stores annually starting in FY27.
Financial Performance Snapshot
Trent’s financial health appears robust based on its FY26 performance. The company reported a consolidated net profit of ₹413.1 crore for the January-March quarter, marking a 32.57% increase compared to the same period last year. Revenue for the quarter rose by 19.23% to ₹5,027.99 crore. For the full fiscal year FY26, the company recorded a profit of ₹1,721.33 crore on total income of ₹20,189.05 crore.
The Funding Plan
To support this growth, Trent is planning to raise ₹25 billion. The capital is earmarked for investments in warehousing, artificial intelligence, and technology, as well as selective property ownership. Management indicated that most stores reach a break-even point within 12 months of operations, which provides cash flow to fund further expansion, though the Star format typically takes longer to reach this milestone.
Execution Risks And Monitorables
While the expansion plans are ambitious, investors should keep a close watch on several execution factors. Scaling a network to 5,000 stores brings significant operational complexity, including supply chain management and maintaining store-level profitability.
Additionally, the retail sector in India is highly competitive. Trent faces pressure from both established retail giants and expanding regional players. Another critical monitorable is the Star business; while the company has focused on recalibrating this format, the longer break-even timeline compared to its fashion formats means it requires careful capital allocation to avoid dragging down overall margins. Investors will likely track the quarterly progress of store additions and whether the company can maintain its 'like-for-like' sales growth as it continues to add more outlets.