Trent Q4FY26: Revenue +20%, EBITDA +43%, margins up

Growth re-accelerates after a soft patch

Trent’s latest quarterly update points to a recovery after several quarters of slowing growth. Revenue growth rose to about 20% year-on-year in Q4FY26, helped by an improvement in like-for-like (LFL) performance. The company’s LFL moved to low single-digit growth in Q4FY26, after being mildly negative in Q3FY26. For investors tracking Trent’s growth engine, the shift matters because the recent slowdown had been linked to weaker LFL and lower early productivity of new stores.

The broader narrative is that Trent continued to grow its footprint even as same-store growth weakened at points in FY26. Brokerages have highlighted that this combination can temporarily depress revenue productivity, but it can also set up the next leg of growth if the new-store ramp-up stabilises. Q4FY26’s LFL recovery, even if modest, is a data point that the demand and execution environment improved relative to the prior quarter.

FY26 store additions stayed aggressive across formats

Trent’s expansion in FY26 remained store-led. The company added net 198 Zudio stores, 52 Westside stores, and 6 Star stores in FY26. The pickup in Westside additions is important for the mix because brokerages linked gross margin strength partly to a favourable product and format mix.

Store growth has been a key driver behind Trent’s longer-term financial model. Motilal Oswal’s FY26-28E assumptions, as cited in its note, include about 20% CAGR in retail footprint additions and forecast 19%/19%/12% growth in standalone revenue/pre-Ind AS EBITDA/adjusted PAT over FY26-28E. These projections underscore the centrality of execution in store openings and the ramp-up curve of fresh stores.

Margins improve on mix and cost controls

In Q4FY26, Trent’s gross margin expanded by about 170 basis points year-on-year, which was attributed to a favourable mix. The brokerage commentary flagged that a pickup in Westside store additions likely supported this change.

Operating leverage was more visible at the EBITDA line. Q4FY26 pre-Ind AS EBITDA rose 43% year-on-year, driven by about 215 basis points year-on-year margin expansion. The emphasis in the report was that robust cost controls continued to surprise both analysts and the market. Cost discipline has been a recurring theme in Trent’s recent quarters, and Q4FY26 added another datapoint of margin resilience even when the company has been expanding rapidly.

What brokerages said: Motilal Oswal, Morgan Stanley, Elara

Motilal Oswal reiterated a Buy view on Trent, while also revising targets in different reports and contexts. One note reiterated Buy with a revised target price of INR 5,250, premised on 45x FY28E EV/pre-Ind AS EBITDA for the standalone business (Westside and Zudio), 2.5x EV/sales for the Star JV, and about 2x EV/EBITDA for the Zara JV. The same note also stated the stock was trading at about 62x FY28 standalone P/E, excluding contribution from the Star and Zara JVs.

Separately, another Motilal Oswal update maintained Buy but trimmed the target price to INR 4,350 (earlier INR 5,200). That target was based on 40x FY28E EV/pre-Ind AS EBITDA for the standalone business, 2x EV/sales for the Star JV, and around 1.5x EV/EBITDA for the Zara JV. In a company update dated 23 March 2026, Motilal Oswal cited a CMP of INR 3,366 and a target price of INR 4,350, with a view that an earnings downgrade cycle could continue in the near term.

Other brokerage views in the provided text were also constructive. Morgan Stanley rated Trent “Overweight” with a target price of INR 4,835, implying about 9% upside from the then-current level referenced in that report. Elara Capital rated it “Accumulate” with a target price of INR 4,800, and linked revenue strength primarily to new store openings.

Earlier-quarter context: why LFL mattered so much

Brokerage commentary indicated that Trent’s revenue growth deceleration had persisted through FY26. In Q3FY26, revenue growth was cited at 16% year-on-year, alongside marginally negative LFL. The factors mentioned included a festive shift, subdued consumer sentiment, and lower initial productivity of newly added stores. Despite that, strong cost discipline helped expand Q3FY26 pre-Ind AS EBITDA margin by about 90 basis points to 15.6%, driving about 23% year-on-year growth in pre-Ind AS EBITDA.

In Q2FY26, revenue growth was cited at 17% year-on-year, with commentary pointing to a sharp 17% year-on-year decline in revenue per square foot, interpreted as store-level cannibalisation amid rapid store additions. In that quarter, Star business revenue was cited as declining about 2% year-on-year, with store upgrades mentioned as a factor.

Financial datapoints disclosed in the notes

Some of the disclosed operating and cash flow numbers provide context to the expansion strategy. In the period discussed in the Motilal Oswal note, standalone revenue was cited at INR 47 billion (up 17% year-on-year). Reported EBITDA was cited at INR 8.1 billion (up 27% year-on-year), while pre-Ind AS EBITDA for Q2FY26 was cited at INR 5.75 billion with a pre-Ind AS EBITDA margin of 12.2%. For 1HFY26, pre-Ind AS EBITDA was cited at INR 11.9 billion, up 26% year-on-year.

The same note cited operating cash flow (after interest and leases) at INR 10 billion, net capex at INR 8.4 billion, and free cash flow at INR 2.3 billion (versus about INR 0.5 billion year-on-year). These datapoints matter because rapid store additions can raise capex intensity, so the direction of cash generation is closely watched.

Stock moves cited across reports

Different reports captured different trading snapshots. One Hindi-language update said that, till the news was written, Trent was trading around INR 4,255, down 4%. Another market update reported that around 01:15 PM, Trent stock was at INR 3,525, up 4.75% versus the previous close of INR 3,365.60. These references appear to be from different dates and contexts, but together they show how broker commentary and quarterly signals have coincided with sharp intraday moves.

Key numbers at a glance

Why the update matters for valuation debates

Trent’s investment case, as reflected in these notes, is increasingly tied to two moving parts: (1) the pace and quality of store expansion, and (2) the sustainability of margin gains through cost control. Q4FY26’s combination of faster revenue growth, LFL recovery, and margin expansion strengthens the near-term narrative on execution.

At the same time, the differing target prices and valuation multiples show that the market remains sensitive to assumptions around earnings trajectory and rerating potential. One Motilal Oswal note flagged that an earnings downgrade cycle could continue in the near term, which could weigh on rerating, even while reiterating Buy.

Conclusion

Trent ended FY26 with an aggressive store rollout and a Q4FY26 pickup in growth, alongside notable gross margin and pre-Ind AS EBITDA margin expansion. Brokerages remained largely positive, but targets varied meaningfully based on valuation assumptions for the standalone business and the Star and Zara JVs. The next set of quarterly disclosures will be watched for whether LFL remains positive and whether the cost-control-led margin profile holds as the store base expands further.