Trent, Tata Group’s prominent retail arm, has announced its financial results for the second quarter of FY25, reporting a remarkable 46% year-over-year (YoY) increase in standalone profit, which soared to ₹423.44 crore. This exceeded expectations set by analysts, although revenue growth came in slightly under projections. Here’s a breakdown of Trent’s Q2 performance and the key drivers behind its financial outcomes.
Profit Outpaces Revenue Amid Market Challenges
In the second quarter of FY25, Trent’s standalone revenue reached ₹4,035.56 crore, marking a 39.6% YoY increase. While substantial, this growth fell below the anticipated ₹4,320 crore. The impressive 46% profit surge underscores the effectiveness of Trent’s strategic initiatives, despite the broader retail sector facing a subdued consumer environment. The company attributed its robust profitability to focused initiatives across product offerings, an expanded store portfolio, and improved operational efficiency within its supply chain.
Operational Margins and Strategic Shifts
Trent reported a solid operating EBIT margin of 10.8% for Q2FY25, showing an improvement from 9.8% in Q2FY24. The company’s flagship fashion brands, Westside and Zudio, maintained stable gross margins, aligning with Trent’s strategic revenue targets. The positive EBIT margin underscores Trent’s success in refining its product mix and optimizing store operations. Emerging categories, including beauty, personal care, innerwear, and footwear, also gained traction with customers and contributed over 20% to total revenue, signaling Trent’s diversified growth approach.
Expansion of Trent’s Store Footprint
Trent continued its aggressive expansion, opening seven new Westside and 34 new Zudio stores in Q2, bringing its presence to over 184 cities. With over 800 large-format fashion stores, the company is well-positioned to capitalize on growing urban and semi-urban demand. Trent also opened its first Zudio store in Dubai, marking a significant step in international expansion. In addition, the company consolidated nine Westside and 16 Zudio locations, reinforcing operational efficiency across its store portfolio.
Star Hypermarket Business Performance
Trent’s Star hypermarket chain also reported positive growth, with Q2FY25 revenue increasing by 27% and like-for-like sales growing over 14%. The segment now operates 74 stores, including two newly opened outlets in Q2. Trent noted that a focus on private-label brands, fresh produce, and general merchandise has driven customer engagement, with these categories contributing more than 73% of Star’s total revenue. The success of private-label offerings has positioned Star for steady growth, with Trent’s team confident about expanding value for both customers and shareholders in the coming quarters.
Chairman Noel Tata’s Perspective
Trent Chairman Noel N. Tata expressed confidence in the company’s future growth, highlighting the team’s ability to deliver strong results across multiple retail formats. He emphasized that Trent’s “playbook” for optimizing store operations has been effectively applied to Star, strengthening customer loyalty and enhancing brand positioning. Tata also noted that consumer sentiment remains cautious, and seasonality poses some headwinds, but the company’s strategic focus on own-brand products and operational resilience continues to yield strong performance metrics.
Market Reaction to Earnings Results
Following the earnings report, Trent’s shares experienced a notable decline, trading around 4% lower at ₹6,650 on the Bombay Stock Exchange (BSE). Intraday trading on the National Stock Exchange (NSE) saw shares drop over 9%, reaching ₹6,306.85 per share. Market analysts attributed the decline to missed revenue expectations, marking the first instance in over three years that Trent did not meet quarterly revenue forecasts.
On the trading day, around 1.37 million shares, equivalent to a 0.4% equity stake in Trent, exchanged hands in a block deal worth ₹881.7 crore, with shares priced at ₹6,445 each. This high trading volume reflects investor responses to the company’s financial performance, amid broader market fluctuations.
Future Outlook and Analyst Predictions
A poll by Moneycontrol with major brokerage firms estimated Trent’s Q2FY25 net profit would increase by 53.2% YoY, to approximately ₹444 crore. Despite actual net profit slightly underperforming these estimates, Trent’s YoY consolidated net profit still rose by 47% to ₹335 crore. The consolidated revenue from operations also saw a robust 39% YoY increase to ₹4,157 crore, though it was slightly below the Moneycontrol poll forecast of ₹4,365 crore.
The earnings miss has raised investor caution, as reflected in Trent’s steepest stock price drop since June. However, the company’s strong profit growth and strategic expansion suggest resilience and long-term growth potential, despite temporary market pressures.
Summary of Key Financial Highlights
- Standalone Profit: ₹423.44 crore, up 46% YoY
- Standalone Revenue: ₹4,035.56 crore, up 39.6% YoY
- Operating EBIT Margin: Improved to 10.8%
- Fashion Stores: Over 800, covering more than 184 cities
- New Store Openings in Q2FY25: 7 Westside, 34 Zudio (including 1 in Dubai)
- Star Business Revenue Growth: 27%, with private-label products contributing significantly
Conclusion
Trent’s Q2 FY25 results showcase strong profit growth driven by focused strategies and expansion across retail concepts, though revenue fell short of market expectations. As Trent continues to scale its store network and optimize brand offerings, the company is well-positioned for long-term success in India’s evolving retail landscape. Despite market challenges, Trent’s commitment to diversification, innovation, and customer satisfaction remains a driving force for future growth, aligning with Tata Group’s broader vision of sustainable and scalable retail operations.
