Trent Ltd, the parent company behind India’s well-known retail brands Westside and Zudio, has carved out a dominant position in the fast-growing retail sector. Over the past few years, it has been on an impressive growth trajectory, with its stock surging by approximately 935% from March 2020 to late 2024. But in 2025, this once meteoric rise has stalled. With a stock price decline of 26% since January, Trent Ltd. currently holds the title of this year’s worst-performing Nifty 50 stock—giving investors pause to rethink their outlook on the company.
Is this a mere bump in the road for Trent, or does it signal a larger reckoning for its ambitious retail strategies? Below, we analyze the factors that led to Trent’s recent challenges while exploring its long-term potential in India’s dynamic retail landscape.
Zudio’s Rapid Growth Sparks Momentum—And Challenges
A huge driver of Trent’s earlier stock surge can be attributed to the overwhelming success of its fast-fashion brand, Zudio. Between 2021 and 2024, Zudio’s store count skyrocketed from 168 to 635 locations across India—a feat that positioned it as a powerhouse in the affordable fashion space. Its companion brand, Westside, also expanded its footprint from 194 stores to 238 during this time. However, despite this sizeable gain, the sustainability of Zudio’s growth is now facing scrutiny.
Zudio’s Store Count Progression
| Quarter | Westside Stores | Zudio Stores |
|---|---|---|
| Q3FY24 | 227 | 460 |
| Q4FY24 | 232 | 545 |
| Q1FY25 | 228 | 559 |
| Q2FY25 | 226 | 577 |
| Q3FY25 | 238 | 635 |
| Q4FY25* | 240 | 675 |
*Latest data as of March 10, 2025
Even though Trent achieved revenue growth of 42% and posted a net profit increase of 60% year-on-year in FY25, its store expansion efforts have slowed down considerably. Initial projections anticipated the addition of 190-200 new Zudio stores in FY25. However, only 130 new stores have been added so far. Additionally, Westside’s growth has slumped, with just eight net stores added during this fiscal year, raising concerns among investors.
Balancing Bigger Spaces with Slower Store Growth
Trent’s current strategy involves closing smaller stores in favor of opening larger format outlets. While this approach enhances the customer shopping experience and potentially boosts long-term profitability, it comes with short-term compromises. Sales per square foot and same-store sales growth have seen a dip as a result of this transition.
Interestingly, Kotak Institutional Equities reported inconsistencies in Westside’s total store count on its store locator, which was initially overstated at 269 before being revised down to 240. Analysts are now predicting that Westside will finish FY25 with 243 stores—a pace of growth well below historical trends of adding 14-26 stores annually.
Long-Term Strategy vs. Short-Term Risks
Despite the deceleration in store expansions, analysts continue to see potential in Trent’s long-term story. Centrum Broking analysts describe Trent as a “40% CAGR story,” although Zudio’s sales growth has moderated from above 40% to around 35% over the past nine months. This decline has inevitably impacted how investors value the stock, with its enterprise-value-to-Ebitda (EV/Ebitda) ratio projected to fall from 67.6 in FY25 to 51 by FY26.
The biggest risks for Trent in the short term include:
- Consumer Demand Fluctuations: Shifts in consumer preferences or economic slowdowns can dampen retail spending.
- Store Expansion Metrics: Investors will scrutinize whether Zudio and Westside can sustain meaningful growth in new markets without diluting brand identity.
- Profitability of Non-Core Ventures: Trent’s supermarket chain, Star, must achieve profitability to solidify its diversification efforts.
Samanta from Centrum Broking noted that Trent’s management now appears to be favoring a more cautious expansion strategy. This is a logical move under current market conditions, but it does little to excite growth-oriented investors who had become accustomed to the company’s earlier breakneck pace of scaling.
Exploring New Horizons Beyond Zudio
Recognizing the importance of diversification, Trent is branching out into untapped markets and categories as a way to boost its resilience. Among its notable innovations are the expansions of private labels like Misbu, Samoh, and Utsa, targeting specific customer segments. Additionally, the company has made strategic moves into newer categories, including:
- Zudio Beauty: Affordable personal care products aimed at capitalizing on India’s booming beauty market.
- Lab-Grown Diamonds (Pome): A sustainable alternative appealing to younger generations.
At the same time, competitors such as Aditya Birla Fashion and Retail are navigating their own acquisition challenges, while players like VMart focus on turnaround strategies. Trent’s ability to differentiate itself through these diversification efforts could help it maintain its competitive edge and win long-term market share.
What Does the Road Ahead Look Like?
Despite questions surrounding Trent’s near-term stock performance, its fundamentals remain strong. Industry experts regard its fast-fashion positioning (through Zudio) and department store segment (through Westside) as uniquely well-suited for India’s growing middle class.
Trent’s strategy of balancing slow, measured growth with long-term profitability goals appears to be a recalibration rather than a retreat. While this cautious approach may frustrate short-term investors, it aligns well with sustainable business principles.
Ultimately, Trent’s ability to execute on its current plans—be it through stronger sales at Zudio, efficient use of larger store spaces, or higher profitability from newly diversified ventures—will be pivotal.
Time to Trim the Sail or Weather the Storm?
Trent Ltd’s recent story highlights the dual nature of high-growth companies. While its early dominance in India’s retail market places it on firm footing, the road to sustaining rapid-growth levels is fraught with challenges. That said, the company’s diversification efforts, focus on larger stores, and potential in untapped markets give it a strong strategic direction moving forward.
For investors, the central question remains whether Trent’s current recalibration means delayed returns—or signals an enduring blueprint for success.
Feel free to share your experiences and insights in the comments below. Let’s continue the conversation and grow together as a community of traders and analysts.
By sharing this experience and insights, I hope to contribute to the collective knowledge of our professional community, encouraging a culture of strategic thinking and informed decision-making.
As always, thorough research and risk management are crucial. The dynamic nature of financial markets demands vigilance, agility, and a deep understanding of the tools at your disposal. Here’s to profitable trading and navigating the election season with confidence!
Ready to stay ahead of market trends and make informed investment decisions? Follow our page for more insights and updates on the latest in the financial world!
For a free online stock market training by Yogeshwar Vashishtha (M.Tech IIT) this Saturday from 11 am – 1 pm, please sign up with https://pathfinderstrainings.in/training/freetrainings.aspx
Experience profits with my winning algo strategies – get a free one-month trial with ₹15 lakh capital! – https://www.terminal.algofinder.in/auth/register
Disclaimer
This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.