Trent, the fashion and retail arm of the Tata Group, recently faced a notable dip in its stock value, dropping 4.5% to Rs 5,160.50. This decline followed a disappointing report revealing a 55% year-on-year plunge in consolidated net profit, which fell to Rs 318 crore for Q4 FY25, down from Rs 704 crore in Q4 FY24. Moreover, there was a 36% decrease in net profit quarter-on-quarter, raising concerns among investors.

Revenue Growth Amid Profit Decline

Despite the significant profit drop, Trent reported a 28% increase in revenue for the quarter, reaching Rs 4,217 crore compared to Rs 3,298 crore the previous year. However, this figure marks a 9.4% decline from Rs 4,657 crore in Q3 FY25. The company announced a dividend of Rs 5 per equity share, demonstrating its commitment to returning value to shareholders.

• Standalone Performance: Trent’s standalone net profit also fell, down 46% year-on-year to Rs 350 crore from Rs 654 crore in Q4 FY24. Nevertheless, revenues climbed by 29% to Rs 4,106 crore, compared to Rs 3,187 crore in the same quarter last year.

Impressive Annual Growth

Looking at the full fiscal year, Trent’s consolidated net profit surged by 38% to Rs 18,141 crore. The company operates over 1,000 large-format fashion stores and is strategically enhancing its presence across 242 cities, showcasing its growth strategy.

Analyst Insights on Trent

Morgan Stanley continues to endorse Trent with an ‘Overweight’ rating, setting a target price of Rs 6,359 per share. The brokerage highlighted that the unexpected gross margin compression in Q4 FY25 suggests potential inventory write-offs.

In contrast, Axis Securities remains optimistic about Trent’s long-term potential, despite cutting its target price by 6.3% to Rs 6,650 per share. They noted that the fashion segment achieved mid-single-digit like-for-like growth in Q4 and double-digit growth overall for the year, driven by a 40% increase in revenue and an impressive expansion in retail space, totaling 13 million square feet.

Recent Stock Performance

Trent’s stock has seen a decline of 1.8% over the last five trading sessions and a 7% drop in the past month. Over the past six months, investors have experienced a 27% decrease in stock value. However, over the last year, Trent’s shares have provided an 18% return, indicating some resilience amidst the recent volatility.

With the ongoing market fluctuations, Trent’s management continues to focus on long-term strategies that could enhance shareholder value and bolster its position in the competitive retail landscape.