Shares of Trent Ltd remain in focus as leading brokerages Morgan Stanley and Jefferies shared contrasting views on the company following its Q2FY26 results, which reflected resilient margins despite muted fashion demand. The stock last traded at ₹4,618.50.
Morgan Stanley maintained its overweight call with a target price of ₹5,456 per share, implying an upside of nearly 18% from the current level. The brokerage highlighted that Trent’s consolidated revenue and EBITDA rose 16% and 27% YoY, respectively, aided by efficient cost management. It noted that unseasonal rains and muted consumer sentiment impacted fashion demand, though customers prioritised high-ticket purchases following GST cuts.
Morgan Stanley added that the company maintained a standalone EBITDA margin of 17.2%, with gross margins steady at 43.3%, supported by lower employee and occupancy costs. Margins across Westside and Zudio formats also remained consistent, underscoring Trent’s operational strength.
Meanwhile, Jefferies retained its hold call but cut the target price to ₹5,000 per share, implying a modest 8% upside. The brokerage said revenue growth slowed to 17%, marking a multi-quarter low, and operating EBITDA margins were nearly flat, in line with topline growth. It noted that while store additions picked up sequentially, like-for-like fashion sales remained muted in the low-single digits. Jefferies, however, said non-apparel categories and online channels continued to gain share within the Westside format.
Both brokerages expect Trent’s multi-format strategy and continued expansion of its affordable retail segment to support long-term growth, even as near-term fashion demand remains subdued.
Disclaimer: The above article is based on brokerage reports and is for informational purposes only. It does not constitute investment advice or recommendations to buy or sell any securities.
