Trent: Favorable Risk-Reward Ratio; Upgrade To Buy

In 9MFY26, Trent delivered ~18/21% revenue/PBT growth YoY (36bps PBTM expansion). While SSSG remained subdued at low single digits, topline growth was primarily fueled by retail area expansion – Zudio added 89 stores (net) in 9MFY26 (average store size up ~11% YoY). Westside accelerated expansion as well as added 30 stores (net) in 9MFY26 alone – surpassing its historical annual run rate of 14-18 stores over FY23-25 (average store size up ~10% YoY). We have been reiterating that Trent may be on the cusp of an SSSG revival, aided by (1) Zudio’s strategic geographic pivot from its maturing core catchments in the South and West to relatively under-explored North and East (N and E) regions (58% of incremental store additions YTD have come in under-retailed but promising catchments of N and E), (2) the lion’s share of the 309 recently added stores (57% of FY24 store base of 545 stores) will roll into the SSSG computation FY27 onwards, and (3) Westside’s >50% surge in FY25 memberships may also prove to be SSSG-friendly, going forward. Zudio’s expansion still has significant runway, with a steady pace of adding 180–190 stores annually over FY26-28. This is supported by its presence across 225 district catchments, of which 139 have five or fewer stores. In these markets, Zudio already commands over 15% share among value fashion peers, indicating limited competitive alternatives and strong growth potential. Supported by these healthy future KPIs (SSSG and store expansion) and a favorable risk-reward ratio following >30% stock price correction since Sep-25, we upgrade Trent to BUY with an SOTP-based TP of INR 4,300/sh (includes 55x FY28 P/adj. EPS for the standalone business and 2x FY28 EV/sales for Star). Note: We have cut our multiple to 55x FY28 P/E (from 60x) to realign valuations vs the broader discretionary universe.

Zudio’s geographic pivot supports future SSSG: While the company continues to selectively densify established Tier 1 and 2 catchments, over 75% of new Zudio stores were opened in Tier 2, Tier 3, and peripheral micro-markets during 9MFY26, indicating that network densification in its core catchments is moderating. Consequently, Zudio’s expansion has pivoted away from its maturing core catchments in the South and West to relatively under-explored North and East regions which accounted 58% of store additions YTD, up from 43% in FY25 and 33% in FY24. While the SSSG in the medium term will stay under pressure (9MFY26: low single digit), we suspect this softness may be transient as (1) the targeted North and East catchments remain significantly under-retailed; notably, in roughly 50 of the 100+ districts (comprising 280+ stores) Zudio occupies in these regions, it operates ≤ 5 stores and commands a store share of > 15%, indicating a healthy headroom to expand (180-190 store additions over FY26-28 built-in), and (2) the lion’s share of the 309 recently added stores (57% of FY24 store base of 545 stores) will roll into the SSSG computation FY27 onwards.

Westside’s expansion is encouraging, Star remains a WIP:The company has accelerated its store addition pace in Westside, adding 30 stores (net) in 9MFY26 alone – surpassing its historical annual run-rate of 14-18 stores over FY23-25. Also, Westside onboarded 5.5mn Weststyle club members in FY25. As this recently-acquired member cohort matures, we expect it to serve as a tailwind for Westside’s SSSG over FY26-28. Consequently, we build in ~16% revenue CAGR for Westside over FY26-28, led by annual SSSG of ~7% alongside steady margins of ~15%. Conversely, Star remains a WIP – the overall topline growth remained muted at ~2% YoY in 9MFY26. While the staples and fresh outpaced the portfolio growth in 9MFY26; both FMCG (an important footfall anchor) and GM/apparel (a key margin driver) lagged. In our view, Star needs to fix this before pursuing any elaborate expansion strategy.

Outlook:Trent remains a stellar business, supported by healthy future operational KPIs (SSSG and store expansion) and a favorable risk-reward ratio following >30% stock price correction since Sep-25; we upgrade it to BUY with an SOTP-based TP of 4,300/sh (includes 55x FY28 P/adj. EPS for the standalone business and 2x FY28 EV/Sales for Star).