Trent stock: Motilal targets ₹4,350 in FY28

What changed in the latest brokerage view

Domestic brokerage Motilal Oswal Financial Services (MOSL) has reiterated its Buy rating on Trent Ltd. while publishing multiple notes with different target prices and valuation assumptions. In one update, the brokerage maintained Buy with a revised target price of ₹4,350, down from an earlier ₹5,200. Separately, another MOSL note reiterated Buy with a target price of ₹5,250, dated April 22, 2026. The broader thrust across these notes remains consistent: growth slowed in recent quarters due to weak like-for-like (LFL) performance and self-cannibalisation, but signs of improvement are emerging. MOSL’s channel checks suggest sales decline in cannibalised stores has eased, and LFL recovery is underway. Even with softer growth, the brokerage highlighted strong cost controls supporting profitability.

Trent’s stock move and the market context

Trent shares surged around 5% to an intraday high of ₹3,532 on the NSE amid broad-based buying. The move was linked in the note to a sharp fall in crude oil prices and rising hopes of de-escalation in the West Asia conflict. MOSL cited a current market price (CMP) of ₹3,366 alongside its ₹4,350 target, implying a potential upside of about 29% in that specific report. The brokerage also flagged that store productivity is unlikely to return to FY23–FY25 levels, even if cannibalisation gradually eases. That framing matters because Trent’s valuation already prices in strong execution, leaving re-rating dependent on visible acceleration in revenue and earnings.

Q4 FY26: growth recovery after a slowdown

After several quarters of growth deceleration, MOSL said Trent witnessed growth recovery in Q4 FY26. One MOSL note stated Trent’s revenue grew about 20% in 4QFY26 as LFL recovered to low single-digit growth, from mildly negative in 3Q. The brokerage positioned this as an early sign that pressure from store cannibalisation may be moderating. At the same time, it cautioned that the recovery is still at an early stage and will need to sustain for meaningful margin expansion. The notes also indicated that RFID-led benefits are largely factored in, making same-store sales growth (SSSG) a key variable for further profitability improvement.

Store additions and the productivity trade-off

MOSL highlighted Trent’s footprint expansion as a continuing positive, even as it creates near-term productivity noise. In FY26, Trent added 198 net Zudio stores, 52 net Westside stores, and 6 net Star stores, according to the brokerage note. MOSL continues to like Trent for strong footprint additions and retail formats with robust store economics. However, it also warned that store productivity could remain under pressure in FY27 because stores added in tier 2+ markets typically start with lower productivity and take longer to mature compared with metro and tier 1 stores. This is a key nuance in the MOSL thesis: expansion supports long-term runway, but near-term averages can soften as the base broadens.

Margins: gross margin improvement and cost control

Despite relatively weaker growth in parts of the recent period, MOSL said Trent maintained strong cost controls to sustain healthy profitability in FY26. The brokerage noted gross margin expanded about 170 basis points year-on-year, likely helped by a favourable mix with a pick-up in Westside store additions. It also flagged a sharp improvement in operating profitability in Q4 FY26, with pre-Ind AS EBITDA rising 43% year-on-year, driven by about 215 basis points of margin expansion. In MOSL’s framing, future margin expansion would largely depend on recovery in LFL growth. This reflects the idea that fixed-cost leverage and better mix can help, but sustained same-store momentum is needed for margins to structurally improve.

How Motilal Oswal is valuing Trent in its SoTP

MOSL’s target price construction uses a sum-of-the-parts (SoTP) approach across Trent’s businesses and joint ventures. In the ₹4,350 target note, the brokerage anchored valuation on 40x FY28E EV/pre-Ind AS EBITDA for the standalone business (Westside and Zudio), 2x EV/sales for the Star JV, and around 1.5x EV/EBITDA for the Zara JV. In a separate note reiterating Buy with a ₹5,250 target, MOSL used 45x FY28E EV/pre-Ind AS EBITDA for the standalone business, 2.5x EV/sales for Star JV, and about 2x EV/EBITDA for Zara JV. Another MOSL note cited a revised target of ₹6,400 using 50x Sep’27 EV/EBITDA for the standalone business, about 3x EV/sales for Star JV, and about 7x EV/EBITDA for Zara JV. These varying assumptions explain why published targets differ across time and reports.

Key numbers mentioned across the notes

What MOSL sees as rerating triggers and risks

Across the notes, MOSL consistently pointed to revenue growth acceleration as the key trigger for any further re-rating. It also noted that with RFID-led benefits largely factored in, recovery in SSSG remains central to further margin expansion. On risks, the brokerage highlighted that cannibalisation from rapid expansion and subdued demand affected LFL trends, and while cannibalisation should ease, store productivity may not revert to FY23–FY25 levels. In one valuation comment, MOSL said the stock currently trades at about 62x FY28 standalone P/E, excluding contribution from the Star and Zara JVs. That valuation context reinforces why incremental upside, in the brokerage’s view, is tied to evidence of a sustained demand recovery and stronger same-store metrics.

Growth runway: Star cities and emerging categories

MOSL said it remains positive on Trent due to strong store economics and a long runway for the Star business, with the presence described as limited to 11 cities in one note and 12 cities in another. The brokerage also highlighted potential scale-up of emerging categories such as beauty, innerwear, and footwear. These categories can broaden the basket and support growth beyond core apparel-led expansion, but the notes did not quantify their current contribution. Separately, MOSL built in a CAGR of 21% in consolidated revenue, 19% in pre-Ind AS EBITDA, and 17% in adjusted PAT over FY26–FY28E in one of the updates. This forecast framing again ties back to the central debate: how quickly LFL recovers while expansion continues.

Conclusion

Motilal Oswal’s successive updates on Trent keep the stock in the Buy bucket, while target prices and valuation multiples vary by report and time period. The brokerage sees Q4 FY26 as a point of growth recovery, supported by easing cannibalisation and continued cost control, alongside strong store additions in FY26. At the same time, it flags that store productivity could remain under pressure as the mix shifts to tier 2+ expansion, and that SSSG recovery is crucial for margin expansion. For investors tracking the stock, the clearest signposts in these notes are LFL trajectory, the pace of revenue acceleration, and whether profitability improvement remains driven by sustainable operating leverage rather than one-offs. Future brokerage revisions, if any, are likely to stay anchored to these reported KPIs and the SoTP valuation framework referenced in the notes.