Trent Rises 7% as Q2 Profit Grows 25%, Broker Views Diverge

Trent’s 25 per cent increase in consolidated net profit to ₹468 crore for the July–September 2026 quarter helped lift its shares 7 per cent on Friday. The result points to continued momentum across the retailer’s brands, while the range of brokerage views shows that investors are weighing that growth against store productivity, costs and valuation.

The company’s shares traded at ₹3,033.30 on the NSE by 9.53 am, after reaching ₹3,060. The reported profit growth was supported by expansion of Zudio, stronger revenue at Star grocery and improved operating margins. Those factors offer different signals: new outlets can extend a brand’s reach, while better margins indicate that more of the sales are translating into operating profit.

Expansion and productivity in focus

Store additions remain central to the outlook, but the pace of expansion alone doesn’t settle the question of how much each new location contributes. Bernstein maintained its ‘outperform’ rating and ₹3,500 target price, pointing to improved margins while flagging slower store additions and declining revenue productivity. That combination captures a key tension in Trent’s growth story: expansion can add sales capacity, yet weaker productivity may make the returns from that capacity less compelling.

HSBC kept its ‘buy’ rating and raised its target price to ₹3,480 from ₹3,390. It expects momentum to continue in the second half of FY27, led by Westside and Zudio expansion. The brokerage expects the annual store-opening pace to stay broadly steady, with Tier II and peripheral markets remaining priorities.

HSBC also increased its FY27 EBITDA estimate by 7 per cent and its FY28–29 estimates by 2–3 per cent. It cited Westside growth as a counterweight to weaker expectations for Zudio. That distinction matters because the brands may not contribute equally to the company’s expansion or earnings outlook. The source figures point to a more favorable view of Westside offsetting some caution around Zudio, rather than a uniform upgrade across the business.

Jefferies retained its ‘hold’ rating but lowered its target price to ₹3,300 from ₹3,435. It kept its annual store-opening guidance at 200–250 Zudio stores and 50 Westside stores. The brokerage sees emerging categories, online channels and entry into smaller cities as potential sources of growth. It also flagged input-cost inflation and competition, which led it to lower valuation multiples.

Those store targets make the execution question concrete: maintaining the planned pace requires Trent to keep finding locations and building demand across different markets. Expansion into smaller cities may widen the customer base, but the source does not quantify how quickly new stores reach expected sales levels. Jefferies’ concern about revenue productivity is therefore relevant alongside the headline store count.

Revenue estimates rise as earnings views diverge

Citi maintained its ‘sell’ rating and cut its target price to ₹2,815 from ₹2,950. It expects the annual opening pace to remain broadly consistent and also points to smaller cities as an area for expansion. Citi raised its FY27–29 revenue estimates by around 2 per cent, citing improving consumer sentiment, while lowering its FY27 and FY28 earnings per share estimates by 6 per cent and 3 per cent, respectively.

The split between higher revenue estimates and lower earnings per share estimates illustrates why sales growth does not automatically settle the earnings outlook. Input costs can reduce the portion of revenue that reaches the bottom line, and Citi also cited valuation concerns. Its view differs from HSBC’s forecast revisions, which raised EBITDA estimates, while Bernstein emphasized improved margins but questioned productivity and the pace of openings.

Each brokerage is therefore placing different weight on the same broad set of drivers. The optimistic case rests on continued expansion, stronger Westside performance and margin improvement. The more cautious readings focus on store-level sales productivity, cost inflation, competition and the price investors are being asked to assign to future earnings. The target prices range from ₹2,815 at Citi to ₹3,500 at Bernstein, reflecting that disagreement rather than a shared assessment of the quarter.

Leadership transition adds a company development

Separately, Noel N Tata is set to step down as chairman after nearly three decades associated with the company. The source provides no further detail on how the change relates to Trent’s operating plans, so the immediate financial picture remains centered on the reported quarter and the competing assessments of expansion, margins and costs.

For the next stages of Trent’s story, the clearest measures to watch are whether the company sustains its store-opening pace, how Westside and Zudio perform, and whether margin improvement can hold up as input costs and competition affect the business. The quarter delivered stronger profit; the broker views show that the durability and quality of that growth remain open questions.