Citi has maintained its sell rating on Trent with a target price of ₹4,350 per share, even as reported revenue growth came in marginally ahead of expectations, citing ongoing concerns around store productivity and revenue density.
The brokerage noted that standalone revenue grew 16.9% YoY, slightly above its estimate of 15.3%, though this marked a moderation from the stronger growth rates of 19.8% in 1Q and 17.1% in 2Q. Citi attributed the better-than-expected topline largely to higher store additions, rather than improvements in like-for-like performance.
During the quarter, Westside and Zudio added a net 17 and 48 stores respectively, compared with Citi’s estimate of 18 and 40 stores. On a year-to-date basis, Westside and Zudio have added 30 and 89 stores, versus 16 and 220 additions in FY25, underscoring the accelerated expansion strategy currently underway.
However, Citi flagged continued pressure on average revenue per square foot, which declined 15.7% YoY, broadly in line with its estimate. The brokerage noted that productivity metrics have remained under strain across recent quarters, with revenue per square foot declines of 13.9% in 1Q and 15.5% in 2Q. In 3Q, revenue density was impacted by an early festive season, which shifted demand timing, even as comparisons benefited from a relatively weak base in the prior year.
Citi said that while aggressive store additions are supporting headline growth, declining revenue density raises questions around the sustainability of returns, particularly as newer stores take time to mature. As a result, the brokerage remains cautious on valuation and earnings visibility, maintaining its sell stance on the stock.
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