Tata Group’s retail arm Trent surges 3% amid weak markets on Sensex inclusion, with brokerages bullish on Zudio-led expansion and long-term profitability.
Trent Shares Jump 3% to ₹6,078 on BSE Sensex Inclusion, 5-Month High Achieved
Mumbai, June 23, 2025 —Shares of Trent Ltd, the Tata Group’s retail arm, climbed 3% to ₹6,078 apiece on June 23, hitting a five-month high even as broader markets remained weak. The surge came as the stock was officially added to the benchmark BSE Sensex, a move that is expected to bring in passive inflows worth $330 million, according to a report by Nuvama Alternative & Quantitative Research.
This inflow is 5.8 times Trent’s average daily volume (ADV), highlighting rising investor interest and institutional traction.
Sensex Inclusion Boosts Sentiment Amid Global Uncertainty
Trent’s outperformance stands out at a time when geopolitical tensions in the Middle East, particularly between Iran and Israel, have dampened investor sentiment in Indian equities. Despite the market’s cautious tone, Trent has continued to draw attention on Dalal Street due to strong fundamentals, growth ambitions, and strategic clarity.
Strong Q4 Results and Ambitious Growth Strategy Fuel Optimism
Trent’s bullish momentum follows a solid Q4 performance, where:
- EBITDA surged 37% YoY to ₹656 crore, beating expectations of ₹580 crore
- EBITDA margins improved to 16%, signaling operating efficiency
- The company reaffirmed its 25% annual growth target, centered around its value fashion brand, Zudio
At its investor day on June 18, the retailer outlined plans to expand into micro-markets and new retail categories, while maintaining a disciplined pricing strategy focused on full-price sales and private labels.
Zudio at the Core of Trent’s 10x Vision
Trent's strategy revolves around relevance over scale, according to analysts. The company’s leadership, including Chairman Noel Tata, has emphasized that Zudio will be the primary growth engine, focusing on:
- Avoiding discounts and promotions
- Maximizing full-price sell-through
- Using private-label products exclusively
- Not chasing total addressable market (TAM) blindly or adding categories unnecessarily
Brokerage Nuvama noted,
“There is no point driving like-for-like (LFL) growth via discounts or chasing TAM by adding more and more categories… remaining relevant in fashion is the only true moat.”
Brokerages Raise Target Prices, Maintain ‘Buy’ Ratings
Following Trent’s investor day and its strong growth outlook, several brokerages have reaffirmed their bullish stance:
-
Nuvama Institutional Equities:
- Raised target price to ₹6,627 (from ₹6,224)
- Maintained ‘Buy’ rating
- Sharekhan:
- Reaffirmed ‘Buy’ rating
- Revised SOTP-based target to ₹6,781
- Morgan Stanley:
- Maintained ‘Overweight’ view
- Cited management’s confidence in achieving 10x growth by FY32
- HSBC:
- Initiated coverage with a ‘Buy’ rating
- Set a target price of ₹6,700
- Cited Zudio’s rapid expansion and strong operating model
What’s Driving the Buzz Around Trent?
- Sensex inclusion triggers institutional interest and index fund flows
- Strong Q4 financials boost investor confidence
- Clear strategic focus on fashion relevance, brand identity, and profitability
- Aggressive but disciplined expansion plan, avoiding unnecessary diversification
- Leadership under Noel Tata, aligned with long-term value creation
Outlook: A Long-Term Retail Powerhouse in the Making?
Trent’s rise is not just about short-term gains. With a solid operating model, clear brand strategy, and rapid store expansion — especially via Zudio — the company is being positioned as a potential long-term retail leader.
Analysts believe that Trent’s no-discount, private-label-only model, if executed consistently, could build brand loyalty and maintain profitability even as it scales operations.
While brokerages remain upbeat, investors are advised to consult certified financial advisors before making any investment decisions. Market conditions remain volatile due to global geopolitical events.