HSBC has initiated coverage on Trent Ltd. with a ‘Buy’ rating and a target price of ₹6,700, calling it one of the most compelling stories in the Indian retail space driven by Zudio’s rapid expansion and Westside’s transformation.
The brokerage forecasts ~200 new Zudio stores per year over FY25–28, and sees minimal competitive threat in the affordable fashion segment, thanks to Zudio’s tight supply chain, format consistency, and pricing power. HSBC also believes Zudio Beauty—a new vertical under the brand—could be the next major value driver.
In addition, Trent is revamping its Westside format, aiming for better customer experience, store aesthetics, and private label engagement to drive same-store sales growth (SSSG). These efforts are expected to fortify margins and ensure brand relevance.
Although the stock is trading at an optically expensive 75x PE, HSBC argues that the valuation is justified on a PEG basis, which stands at 2.4x compared to 3x for Vishal Mega Mart and 4.7x for Page Industries. Given Trent’s superior earnings growth, profitability, and RoCE profile, HSBC sees meaningful upside potential.
The brokerage notes that Trent’s multi-format expansion strategy, disciplined cost control, and brand stickiness put it in a unique position to deliver high-quality growth over the next several years.
