Trent, a prominent retail chain, has announced a robust 20 per cent revenue rebound in Q4FY26, alongside strategic plans to raise up to Rs 2,500 crore in equity for extensive store network upgrades, new brand launches, and supply chain automation, further solidifying its market position.
Key Points
- Trent's revenue grew 20 per cent in Q4FY26, with like-for-like (LFL) growth recovering to low single digits from negative in Q3.
- The company added 198 Zudio, 52 Westside, and 6 Star Bazaar stores in FY26, contributing to a 32 per cent year-on-year net retail area addition.
- Trent's board has approved raising up to Rs 2,500 crore in equity to invest in upgrading its store network, launching new brands, automating the supply chain, and expanding Star Bazaar.
- The board also approved a 1:2 bonus issue and a Rs 6 dividend, despite the significant capex plans.
- Despite strong growth, management notes cautious discretionary spending due to macro factors and geopolitical volatility impacting input costs.
Trent's revenue growth rebounded 20 per cent in the fourth quarter of 2025-26 (Q4FY26) as like-for-like (LFL) growth in stores recovered to low single digit from negative in Q3.
Trent added 198 Zudio, 52 Westside and 6 Star Bazaar stores in FY26 at the net level.
The gross margin expanded 170 basis points year-on-year (Y-o-Y), driven by a favourable mix.
The Q4FY26 pre-IND AS earnings before interest, depreciation, taxes and amortisation (Ebidta) rose 43 per cent Y-o-Y, driven by 215 basis points Y-o-Y margin expansion.
FY26 Performance Overview
In FY26, despite a moderation in revenue growth to 18 per cent (40 per cent Y-o-Y growth in FY25), Trent's pre-IND AS Ebidta grew 27 per cent and adjusted net profit rose 24 per cent Y-o-Y, propelled by cost efficiency measures.
In FY26, Trent's revenue grew 18 per cent Y-o-Y to Rs 19,700 crore, driven by 32 per cent Y-o-Y net retail area addition. Reported operating profit grew 32 per cent Y-o-Y to Rs 3,640 crore as Ebidta margin expanded 200 basis points Y-o-Y to 18.5 per cent.
Pre-IND AS Ebidta rose 27 per cent Y-o-Y to Rs 2,690 crore as margins expanded 100 basis points Y-o-Y to 13.65 per cent.
The reported FY26 net profit grew 24 per cent Y-o-Y to Rs 1,970 crore.
The adjusted net profit accounts for 25 per cent Y-o-Y adjustment for labour code impact. Working capital days improved to 33 from 37 Y-o-Y, as inventory days reduced to 42 days from 44 Y-o-Y.
Trent's net cash stood at Rs 290 crore in FY26, compared to Rs 340 crore in FY25.
The capex surged over 80 per cent Y-o-Y to Rs 1,490 crore, with Y-o-Y free cash flow (FCF) generation at Rs 190 crore.
Strategic Investments and Shareholder Returns
The board has approved raising up to Rs 2,500 crore in equity to investments in upgrading store network, pushing new brands, automating the supply chain, and supporting a rollout of Star Bazaar through real estate development.
The Q4FY26 standalone revenue at Rs 4,940 crore grew 20 per cent Y-o-Y, with 32 per cent Y-o-Y net area additions by end FY26 even though revenue per square feet dipped 11 per cent Y-o-Y.
The LFL growth for the fashion portfolio recovered to low single digit in Q4FY26 (against marginally negative growth in Q3).
Gross profit grew 25 per cent Y-o-Y to Rs 2,190 crore as gross margin rose 170 basis points Y-o-Y to 44.3 per cent.
The employee cost was up 11 per cent Y-o-Y, but sales, general and administration (SG&A) and other costs rose 18 per cent Y-o-Y.
The occupancy cost (rentals recorded above Ebidta) grew 15 per cent Y-o-Y, while lease rentals (below Ebidta) rose 33 per cent Y-o-Y, resulting in overall rental growth of 21 per cent Y-o-Y.
Operational Efficiency and Market Outlook
Reported Ebidta grew 40 per cent Y-o-Y to Rs 920 crore, with reported Ebidta margins expanding 265 basis points Y-o-Y to 18.6 per cent.
Trent claimed Q4FY26 standalone pre-IND AS Ebidta grew 43 per cent Y-o-Y to Rs 670 crore, with pre-IND AS Ebidta margin of 13.5 per cent, up 215 basis points Y-o-Y, while standalone Pre-Ind AS Ebit margin stood at 11.5 per cent, up 180 basis points Y-o-Y.
Depreciation rose 38 per cent Y-o-Y and interest costs were up 12 per cent Y-o-Y, while other income declined 37 per cent Y-o-Y, resulting in 30 per cent Y-o-Y growth in net profit to Rs 450 crore.
The operating cash flow (after interest and leases) rose 67 per cent Y-o-Y to Rs 1,680 crore.
The Q4 capex jumped to Rs 1,480 crore, compared to Rs 820 crore in FY25.
The management says consumer sentiment was stable in Q4, but discretionary spend remained cautious due to macro.
Geopolitical volatility impacted input costs and labour availability.
India sourcing offers partial insulation, but there are inflationary pressures and negative impact on sentiment due to the war.
LFL growth was in low single digits in Q4FY26 and FY26.
Management is focussed on micro-market revenue growth not store-level LFL.
New markets will take two-three years to reach maturity.
The focus is on gradual premiumisation and brand moat expansion and competitive intensity is high.
Hence, the board has approved equity infusion for investments.
The company has also approved a 1:2 bonus and Rs 6 dividend, which is slightly inconsistent with the need for capex.
Trent has good cost controls and is generating steady cash flows.
Further recovery in LFL growth is monitorable since sustained revenue growth acceleration is needed for upgrades.
It is highly valued, which limits room for upgrades and the price has swung in both directions post results.
