Trent’s growth story may no longer be driven solely by Zudio. Bernstein believes Westside is entering a new phase of expansion that could strengthen the retailer’s long-term earnings profile and provide investors with an additional growth engine as the business scales its premium fashion format.
The brokerage maintained an ‘Outperform’ rating on Trent while reducing its target price to Rs 3,500 from Rs 5,000, implying an upside of about 7% from the June 30 closing price. Bernstein said management’s guidance to add around 50 Westside stores annually over the next four to five years has prompted a reassessment of Westside’s contribution to Trent’s long-term growth story.
Westside is stepping out of Zudio’s shadow
Bernstein said Trent’s investment narrative over the past three years has overwhelmingly centred on Zudio, whose rapid store expansion transformed the company’s growth trajectory.
That focus, however, may now be broadening.
The brokerage noted that Westside added 52 stores in FY26, exceeding the combined additions made during the previous three years and comfortably surpassing both Bernstein’s estimates and broader market expectations.
Rather than viewing the acceleration as a one-off event, Bernstein said the store additions reflect a structural shift in strategy supported by improving execution and better visibility into future expansion opportunities.
The brokerage believes Westside can sustainably add around 50 stores annually, taking its network to nearly 500-550 stores over the next four to five years. That would narrow the gap with Pantaloons, which currently operates about 400 stores and is expected to add only around 20 stores each year.
Store rationalisation has created a stronger platform for growth
Bernstein said its proprietary store database indicates that Westside has completed an important clean-up exercise before embarking on a faster expansion cycle.
According to the brokerage, Trent has largely exited weaker markets and underperforming cities, reducing store closures materially during the second half of FY26.
The brokerage identified three important changes in Westside’s expansion strategy.
First, store rationalisation appears largely complete, allowing management to focus on profitable growth rather than network optimisation.
Second, new store additions are increasingly concentrated in India’s top 100 cities, where demand visibility and economics remain favourable.
Third, Westside is pursuing city densification instead of aggressive pin-code expansion, a strategy that differs significantly from Zudio’s rollout model.
Bernstein said these changes provide greater confidence that management’s expansion guidance is both realistic and sustainable.
Expansion remains disciplined rather than aggressive
One of Bernstein’s key observations is that Westside’s faster rollout has not come at the expense of store productivity.
The brokerage’s analysis shows city densification continues to account for the largest share of new stores, while pin-code densification remains measured enough to avoid meaningful cannibalisation.
Overall store density has remained broadly stable despite the acceleration in openings, suggesting management is prioritising profitable expansion instead of pursuing growth for its own sake.
Bernstein also noted that closures reduced sharply after FY25, indicating that most of the portfolio optimisation exercise has already been completed.
Metro and Tier I cities remain the focus
Bernstein said Westside continues to concentrate its expansion in India’s largest consumption centres.
Around 75-78% of the network is located in Metro and Tier I cities, with relatively limited exposure to smaller towns.
The brokerage said the strategy reflects Trent’s preference for markets where organised fashion retail has stronger demand characteristics and better long-term profitability.
It also noted that several exits from smaller cities over the past two years demonstrate management’s willingness to prioritise returns over network size.
“We think Westside has narrowed down its strategy and will focus on increasing density in the top 100 cities,” Bernstein said.
Competitive landscape turning increasingly favourable
Bernstein said Westside has steadily strengthened its competitive position while rival department store chains have struggled to expand.
Between FY23 and FY26, Westside added 86 net stores, compared with only 15 additions by Shoppers Stop, while Pantaloons reduced its network before beginning a measured expansion programme.
Although Pantaloons remains the largest player in terms of store count, Bernstein expects Westside to close much of the gap over the next several years because of its faster expansion plans.
The brokerage also highlighted that Westside has significantly greater city and pin-code density than peers, indicating stronger execution and better consumer acceptance.
“Financial struggles of peers have provided Westside with competitive breathing space to emerge as the benchmark department store format in India,” Bernstein said.
Whitespace opportunity remains significant
A key concern around adding roughly 50 stores every year is the risk of saturation.
Bernstein believes those fears are overstated.
The brokerage’s analysis shows that despite increasing store density, Westside’s network remains well below levels that would indicate widespread cannibalisation.
Nearly 41% of Westside stores still do not face direct department store competition within the same pin code, suggesting meaningful scope to deepen its presence in existing markets.
Bernstein said the company’s calibrated expansion strategy reduces execution risk while preserving long-term growth potential.
| Parameter | Details |
|---|---|
| Company | Trent Ltd. |
| Brokerage | Bernstein |
| Rating | Outperform |
| Target Price | ₹3,500 (earlier ₹5,000) |
| Upside Potential | ~7% (vs June 30 closing price) |
| Key Growth Driver | Westside emerging alongside Zudio |
| Westside Store Addition Guidance | ~50 stores/year for next 4–5 years |
| Target Westside Network | 500–550 stores |
| Expansion Focus | Top 100 cities; city densification |
| Westside Gross Margin | 55%+ |
| Zudio Gross Margin | ~40% |
| Revenue Share | Westside contributes 40%+ of Trent’s revenue |
| Revenue Growth Forecast | ~21% CAGR (next 3 years) |
| Earnings Revision | PAT estimate raised by ~2% |
| Key Positive | Diversifies growth beyond Zudio, supports higher profitability |
Westside strengthens Trent’s earnings profile
Bernstein said the biggest implication of Westside’s faster expansion is not simply higher revenue growth but a stronger earnings mix.
The brokerage noted that Westside generates gross margins of more than 55%, compared with roughly 40% for Zudio.
As the premium format increases its contribution, Bernstein expects Trent’s gross margins to remain resilient while supporting higher profitability over the medium term.
Reflecting the revised store addition assumptions, the brokerage increased its revenue estimates and raised profit after tax forecasts by around 2%. It also increased its FY28 valuation multiple to 65 times earnings from 63 times, citing improved confidence in Trent’s long-term growth outlook.
Bernstein expects Trent to deliver revenue CAGR of around 21% over the next three years, supported by continued Zudio expansion and the acceleration in Westside store additions.
Assesing Westside, Zudio’s contribution to Trent growth
Bernstein said the renewed momentum at Westside does not fundamentally change Trent’s investment thesis because Zudio remains the company’s primary growth engine.
However, the brokerage believes faster growth at Westside provides an important cushion if expectations around Zudio’s store additions or like-for-like sales moderate over time.
Importantly, Westside’s contribution to Trent’s revenue has consistently remained above 40%, making it a much larger and more important business than many investors currently appreciate.
“In light of management’s surprise guidance to add around 50 Westside stores per year, it is time to look at Trent in a new light,” Bernstein said.
“Westside’s faster growth than investors expect provides a cushion to expectations from Zudio on accelerating store additions and recovering to a strong like-for-like growth. But given the share of Westside in Trent revenue has not fallen below 40%, it does not fundamentally change the thesis,” the brokerage added.
Conclusion
Bernstein believes Trent’s long-term investment case has become broader as Westside emerges as a meaningful second growth engine alongside Zudio. The brokerage said a completed store rationalisation programme, a disciplined expansion strategy, stronger competitive positioning and the growing contribution from a higher-margin business provide greater confidence in the company’s earnings trajectory.
While Zudio remains central to Trent’s growth story, Bernstein believes Westside’s acceleration reduces dependence on a single growth format and reinforces its positive view on the retailer.
Disclaimer: The investment ratings, target prices, and retail sector analysis presented in this article are solely the views of the brokerage firm (Bernstein) and do not reflect the opinions of this publication. This content is intended for informational purposes only and does not constitute an offer, solicitation, or recommendation to buy, sell, or hold any equity shares or financial instruments. Individual stock performances are subject to market risks, changing consumer trends, and corporate execution. Readers are strongly advised to conduct independent evaluation and consult a SEBI-registered investment advisor or certified financial planner before making any investment decisions.
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