Trent's Target Price Cut By Goldman Sachs; Morgan Stanley Notes Q4 Miss

Trent Ltd. stock has gotten a target price cut from Goldman Sachs after weaker than expected sales growth in the fourth quarter of fiscal 2025. While, Morgan Stanley noted that Trent's fourth-quarter business update revealed a weaker than expected top-line growth.

Goldman Sachs slashed the target price to Rs 6,760 from Rs 7,500.Trent's sales growth moderated to 28% year-on-year in the fourth quarter, a significant slowdown from the 37% growth reported in the previous quarter. Its standalone gross revenue stood at Rs 4,334 crore, marking a 28% year-on-year increase.



This growth fell short of Morgan Stanley's estimate of 35% net revenue growth. For fiscal 2025, Trent reported a gross standalone revenue growth of 39% year-on-year, slightly below the brokerage's forecast of 42%.Trent's sales typically decline in the fourth quarter due to seasonal factors, but the 9.

7% quarter-on-quarter decline this year was steeper than usual, according to Goldman Sachs. This suggests either a weakness in demand or aggressive discounting to clear inventory. The moderation in sales growth was likely driven by a further slowdown in like-for-like sales, which had already shown signs of deceleration in the third quarter.

The Zudio store count at the end of the fourth quarter reached 765, surpassing Morgan Stanley's estimate of 757. This reflects net additions of 130 stores, with a significant portion of these additions occurring towards the end of the quarter. For the full year, Zudio saw net additions of 220 stores, compared to 193 in fiscal 2024 and 119 in fiscal 2023.

Similarly, the Westside store count at the end of the fourth quarter stood at 248, aligning with Morgan Stanley's expectations. This included net additions of 10 stores, with 22 net store additions in the second half of fiscal 2025, a notable increase from nine net additions in the same period of fiscal 2024. Full-year net store additions were 16, compared to 18 in the last fiscal and 14 in fiscal 2023.

While the financial results fell short of expectations, the 12-month consensus EPS estimate remained unchanged, suggesting a stable outlook for Trent. The company's continued focus on expanding its store network and enhancing its retail offerings position it well for future growth, Morgan Stanley said.Despite the weaker sales growth, Goldman Sachs remains positive on Trent's long-term prospects.

The brokerage expects growth to pick up in FY26, driven by strong store additions in the second half of FY25 and a likely increase in low-ticket discretionary demand.Stock Market Live: Nifty Below 22,000 At Pre-Open, Sensex Down 3,876 Points. Read more on Markets by NDTV Profit.

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