Motilal Oswal sees 12% upside in Trent on Zudio's 5,000-store runway
Brokerage maintains Buy with Rs 3,500 target, citing Zudio scaling from 960 to 5,000 stores, Westside from 300 to 700, and Star format acceleration from FY27. Q4 profit rose 33% YoY to Rs 413 cr on Rs 5,028 cr revenue; private-label mix holds at 73%.
What happened
Motilal Oswal maintains Buy on Trent with Rs 3,500 target (12% upside), citing long runway: Zudio scaling to 5,000 stores, Westside to 700, Star format
Key facts
- 5,000 Zudio stores
- 700 Westside stores
- 960 current Zudio
- 300 current Westside
- 73% private-label share
- Rs 3,500 target
- 12% upside
- Rs 413.1 cr Q4 profit
- Rs 5,027.99 cr revenue
- 33% YoY profit
- 19.23% revenue growth
- Rs 653 cr EBITDA
Why this matters
Trent's accelerating footprint and Star format ramp from FY27 reshape India's value-apparel competitive map, putting pressure on Reliance Retail, DMart Ready, and regional private-label players to lock in real estate and supply-chain partnerships now.
What to watch
- Q1FY26 SSSG print — anything below 7% flags cannibalization
- Net store additions in next two quarters (target: 80+ Zudio/quarter)
- Raw material/cotton price spikes squeezing private-label margins
- Tata Group capital allocation signals — any equity raise dilutes
- Reliance Retail's Yousta store count and pricing actions
- Real estate rental inflation in Tier-2/3 markets
- Track monthly Zudio store-opening cadence vs the 5,000 implied run-rate (need 400+ net adds/year)
- Monitor private-label mix — any slip below 70% signals pricing pressure
- Watch competitor responses: Reliance Yousta expansion, Shoppers Stop value play, Vishal Mega Mart IPO momentum
- Model Westside ASP trajectory as it pivots premium — 700-store target needs urban real estate at viable rents
- Stress-test FY27 Star format breakeven assumptions against DMart's grocery dominance