Synopsis : Bernstein believes Trent's long-term growth story is evolving beyond Zudio as Westside embarks on an ambitious plan to add around 50 stores annually. While the brokerage has reduced its target price amid valuation adjustments, it remains positive on the retailer's earnings outlook, supported by disciplined expansion, higher-margin growth and stronger competitive positioning.
Trent's growth story may no longer revolve solely around Zudio. According to Bernstein, Westside is entering a new expansion phase that could significantly strengthen Trent's long-term earnings profile while reducing the company's dependence on a single retail format.
The brokerage has maintained its 'Outperform' rating on Trent but lowered its target price to ₹3,500 from ₹5,000, implying an upside of about 7% from the June 30 closing price. The revision reflects valuation changes rather than weakening business fundamentals.
Westside emerges as a second growth engine
Over the past few years, investors have largely focused on Zudio's rapid expansion as the primary driver of Trent's growth.
Bernstein believes that narrative is beginning to change.
Westside added 52 new stores during FY26, comfortably exceeding both Bernstein's expectations and the combined additions made over the previous three years.
Rather than viewing the acceleration as a one-off event, Bernstein believes it represents a structural shift supported by stronger execution, improved visibility and a more focused expansion strategy.
The brokerage expects Westside to continue adding around 50 stores annually over the next four to five years, taking its network to approximately 500-550 stores.
Store clean-up has strengthened the expansion strategy
According to Bernstein, Westside completed an important portfolio optimisation exercise before accelerating store openings.
The company has largely exited weaker markets while significantly reducing store closures during the second half of FY26.
Bernstein believes three major strategic changes now support future growth.
First, portfolio rationalisation appears largely complete, allowing management to concentrate on profitable expansion.
Second, new stores are increasingly being opened in India's top 100 cities, where demand visibility remains stronger.
Third, Westside is focusing on increasing store density within existing cities rather than aggressively entering new locations, reducing execution risks and limiting cannibalisation.
Expansion remains disciplined
Despite the faster rollout, Bernstein does not believe Trent is compromising profitability.
The brokerage noted that store productivity remains healthy, while city densification continues to account for most new openings.
Pin-code expansion has remained measured, allowing the company to grow without significantly impacting sales at existing stores.
Store closures have also fallen sharply after FY25, suggesting that the portfolio optimisation process is largely complete.
Metro cities continue driving growth
Bernstein highlighted that approximately 75-78% of Westside's network remains concentrated in Metro and Tier-I cities.
The brokerage believes this strategy reflects Trent's focus on markets offering stronger organised retail demand and superior long-term economics.
Management has also demonstrated a willingness to exit smaller cities where profitability does not meet expectations.
Competitive position continues improving
Bernstein believes Westside's competitive position has strengthened considerably while several rival department store chains have struggled to expand.
Between FY23 and FY26, Westside added 86 net stores, substantially ahead of peers.
The brokerage expects Westside to continue narrowing the gap with larger competitors through sustained expansion and better execution.
Greater city density and stronger consumer acceptance also provide additional competitive advantages.
Significant growth runway still remains
Despite plans to add approximately 50 stores every year, Bernstein believes concerns regarding market saturation remain exaggerated.
Its analysis indicates that nearly 41% of Westside stores still operate without direct department store competition within the same pin code.
This suggests meaningful scope for further expansion without significant cannibalisation.
Higher-margin business strengthens earnings
One of Bernstein's biggest positives is Westside's superior profitability.
The brokerage estimates Westside generates gross margins exceeding 55%, significantly higher than Zudio's approximately 40%.
As Westside contributes a larger share of revenue, Bernstein expects Trent's overall earnings profile to strengthen through higher margins and improved profitability.
Reflecting the revised expansion assumptions, the brokerage has increased its revenue estimates while raising profit after tax forecasts by around 2%.
Bernstein now expects Trent to deliver approximately 21% revenue CAGR over the next three years, supported by continued expansion across both Westside and Zudio.
Zudio remains important, but Westside reduces concentration risk
Bernstein clarified that Zudio remains Trent's primary growth engine.
However, the brokerage believes stronger growth at Westside provides an important cushion should expectations around Zudio's expansion or same-store sales moderate in the future.
Importantly, Westside has consistently contributed more than 40% of Trent's overall revenue, making it a far larger business than many investors currently recognise.
According to Bernstein, investors should increasingly view Trent as a company driven by two complementary growth engines rather than one.
Conclusion
Bernstein believes Trent's investment case has become broader as Westside emerges alongside Zudio as a meaningful long-term growth driver. The brokerage expects disciplined expansion, stronger competitive positioning, higher-margin revenue growth and completed portfolio rationalisation to support earnings over the coming years.
Although the target price has been reduced following valuation adjustments, Bernstein continues to maintain a positive long-term outlook on Trent.
Disclaimer : This article is for informational and educational purposes only. The ratings, target prices and views mentioned are those of Bernstein and do not constitute investment advice or a recommendation to buy or sell any security. Investments in equities are subject to market risks, company-specific risks and changes in consumer demand. Investors should conduct their own research and consult a SEBI-registered investment advisor before making any investment decisions.
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