Trent lifts operating margin as revenue growth outpaces costs
Consolidated revenue grew 17.84% YoY, while management said fashion like-for-like growth was in the low single digits.
Filed 06 Aug 2026, 17:07 IST · after market close · Trent Ltd (TRENT)
Key takeaways
- Consolidated operating margin expanded 2.26 percentage points YoY to 19.62% as revenue growth outpaced expense growth.
- Net profit rose 21.98% YoY, but depreciation grew 40.02% and interest 17.36%, limiting pre-tax profit growth to 22.52%.
- Trent's 19.62% operating margin was 6.32 percentage points above the 13.3% median for 96 reported Consumer Discretionary peers.
Price around the results
Revenue growth came with a wider store footprint
Consolidated revenue grew 17.84% YoY and 14.45% QoQ, with expenses rising more slowly at 14.62% and 12.81%, respectively. Management said Trent opened 1 Westside and 22 Zudio stores in Q1FY27, entered 9 new cities and had 982 Zudio stores at June-end. It also said over 80% of Zudio's new stores were in Tier II, Tier III and peripheral growth markets.
Operating leverage offset higher depreciation
The faster revenue growth expanded operating margin by 2.26 percentage points YoY and 1.18 percentage points QoQ. Depreciation rose 40.02% YoY and 8.91% QoQ, while interest increased 17.36% YoY and 7.41% QoQ; this helped explain why pre-tax profit grew 22.52% YoY against 33.15% growth in operating profit. Other income contributed only 2.9% of pre-tax profit, so the quarter's profit was largely operating in nature.
Margin recovered from Q4 but remained below the Q3 peak
Operating margin improved from 18.44% in Q4FY26 to 19.62% in Q1FY27, reversing the prior quarter's decline, but remained below the 20.23% recorded in Q3FY26. The margin was 6.32 percentage points above the 13.3% median among 96 Consumer Discretionary peers that had reported.
Management flags calibrated demand and continued investment
Management said fashion portfolio like-for-like growth was in the low single digits and that consumers remained focused on value, quality and convenience. It also said select input costs had risen, with mitigation through value-chain measures and price-architecture changes. Management said annual new-store openings should remain broadly consistent with the Chairman's outlook and that internal accruals would fund stores, warehousing, supply-chain infrastructure, automation and technology, including AI initiatives.
No market reaction yet after the late filing
The consolidated results were filed after market close, so there is no post-results move to assess in this update. Across the last 8 results reactions, the stock rose 3 times and fell 5 times, with a median absolute move of 3.36%, indicating a mixed but typically material response history.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹5,755 cr | ₹5,028 cr | +14.45% | +17.84% |
| Other income | ₹20 cr | ₹12 cr | +69.82% | -59.66% |
| Expenses | ₹4,626 cr | ₹4,101 cr | +12.81% | +14.62% |
| Operating profit | ₹1,129 cr | ₹927 cr | +21.73% | +33.15% |
| Operating margin (%) | 19.62% | 18.44% | — | — |
| Interest | ₹47 cr | ₹44 cr | +7.41% | +17.36% |
| Depreciation | ₹410 cr | ₹377 cr | +8.91% | +40.02% |
| Profit before tax | ₹692 cr | ₹519 cr | +33.34% | +22.52% |
| Tax | ₹174 cr | ₹106 cr | +64.29% | +24.13% |
| Net profit | ₹518 cr | ₹413 cr | +25.41% | +21.98% |
| EPS (₹) | ₹9.73 | ₹11.26 | -13.59% | -19.52% |
Operating margin of 19.62% compares with a Consumer Discretionary sector median of 13.30% across 96 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Like-for-like growth for the fashion portfolio was in the low single digits in Q1FY27.
- Emerging categories contributed over 21% of revenue, while Westside online contributed over 6% of Westside revenue.
Guidance & outlook
- The company expects annual new-store openings to remain broadly consistent with the Chairman’s outlook.
- The company says the structural outlook remains encouraging, despite potential near-term implications from Middle East disruptions.
- The company is accelerating its commitment to digital, technological and AI initiatives over the near to medium term.
Expansion
- In Q1FY27, the company opened 1 Westside and 22 Zudio stores, consolidated 3 Zudio stores and entered 9 new cities.
- As of 30 June 2026, the portfolio comprised 301 Westside, 982 Zudio and 29 other lifestyle-concept stores.
- Over 80% of Zudio’s new stores in the quarter were opened in Tier II, Tier III and peripheral new-growth markets.
- The company is investing internal accruals in new stores, portfolio management, warehousing, supply chain infrastructure, automation and technology.
- Star added 5 stores during the quarter, taking its total store count to 86 across 12 cities.
New initiatives
- The company is progressively deploying AI tools and analytical models to support its performance agenda.
- Digital, technology and AI interventions are being deployed across product design, logistics, warehousing and store operations.
- Generative AI is being used to improve insights into fashion trends, fabric direction and product results.
- The company is pursuing structural cost optimization and operating efficiencies as part of its strategy.
- The company is developing newer brands, emerging categories and Zudio’s Middle East presence at varying stages of evolution.
Competition
- Competitive intensity in India’s fashion and lifestyle market has remained high, with no material recent shifts.
Problems & risks
- Geopolitical uncertainties were elevated at the beginning of the quarter, while Middle East disruptions may affect supply chains, commodities and inflation.
- The company says discretionary-category traction remains calibrated as consumers prioritize value, quality and convenience.
- The company is experiencing rising costs for select inputs and is responding through value-chain interventions and price-architecture calibration.
What to watch
- Whether operating margin holds near the Q1FY27 level of 19.62% after the 1.18-percentage-point QoQ recovery.
- Whether fashion like-for-like growth moves beyond the low single digits management reported for Q1FY27.
- Store additions relative to the 1 Westside and 22 Zudio openings reported in Q1FY27.