Perfect past; priced future Revenue growth of ~40% YoY and a 110bps YoY margin expansion YoY (to 12.8%) in FY25—for a portfolio where two-thirds of sales come from value fashion. Unheard of! We concur: Trent is by far the most efficient fashion & lifestyle (F&L) play in India. Now that this fact is out of our system and in the price, we prefer focusing on assessing whether it is nearing peak operating performance across its portfolio. We suspect (1) Westside is showing signs of customer fatigue, (2) Zudio’s efficiency is optimal, (3) success in Star is not a cinch. We’ll double-click on each in a bit. We build in 23% revenue and PBT CAGR over FY25-27 (8-10% lower than consensus). We maintain SELL on Trent with an SOTP-based TP of INR 4,300/sh (incl. 60x adj P/E for the standalone operations).
▪ Outlook: Trent remains a stellar business. However, the ask from the business is too high (from a valuation stencil). Westside seems to be showing signs of customer fatigue, while Zudio seems to be peaking in terms of unit economics. We build in 23% revenue and PBT CAGR over FY25-27 (8-10% lower than consensus). We maintain SELL on Trent with an SOTP-based TP of INR4,300/sh (incl. 60x adj P/E for the standalone operations).
