Trent's standalone margin slips as costs outpace Q2 revenue growth
YoY margin improved by 1.00 percentage point, but higher depreciation, tax and lower other income limited net-profit growth to +8.63%.
Filed 29 Oct 2026, 19:44 IST · after market close · Trent Ltd (TRENT)
Key takeaways
- Standalone revenue grew +22.51% YoY, but operating margin narrowed 1.39 percentage points QoQ as expenses grew +3.91% against revenue growth of +2.14%.
- Net profit rose +8.63% YoY as the tax rate increased 2.34 percentage points and other income contributed 5.3% of pre-tax profit.
- At 18.21%, operating margin was 5.59 percentage points above the median for 102 reported Consumer Discretionary peers.
Price around the results
Revenue growth held up, but sequential profit conversion weakened
Trent's standalone revenue grew +22.51% YoY, with operating profit up +29.56% as expenses grew more slowly than sales. Sequentially, however, revenue rose only +2.14% while operating profit fell -5.12%, showing weaker conversion of incremental sales into operating profit. The 18.21% operating margin remained 5.59 percentage points above the median of 102 Consumer Discretionary peers that have reported.
Faster sequential costs and a higher tax rate limited earnings
QoQ expenses grew +3.91%, faster than revenue at +2.14%, which reduced operating margin by 1.39 percentage points. YoY, expenses grew +21.05%, slower than revenue, lifting margin by 1.00 percentage point. Net profit grew only +8.63% YoY as the tax rate rose 2.34 percentage points, while other income fell -71.35% and represented 5.3% of pre-tax profit.
Store expansion remains the operating focus
Management said like-for-like growth in the fashion portfolio was in the mid-single digits, while emerging categories such as beauty, personal care, innerwear and footwear contributed over 21% of revenue. The company said it opened 10 Westside stores and 19 Zudio stores in Q2FY27, taking Zudio to its 1000th store and the large-box fashion portfolio to over 1,300 stores across 339 cities. Management said annual store-opening growth should remain broadly consistent, and that investments cover new stores, refreshes, warehousing, supply-chain infrastructure, automation and technology.
Results came after the close; past reactions skewed negative
The results were filed after market close on 29 October 2026. Across the last eight results, the stock fell six times and rose twice, with a median absolute move of 3.54%, making a decline the more common historical response. Management said inflation remains elevated across line items and that fashion and lifestyle competition has stayed intense.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹5,788 cr | ₹5,666 cr | +2.14% | +22.51% |
| Other income | ₹34 cr | ₹30 cr | +13.15% | -71.35% |
| Expenses | ₹4,734 cr | ₹4,556 cr | +3.91% | +21.05% |
| Operating profit | ₹1,054 cr | ₹1,111 cr | -5.12% | +29.56% |
| Operating margin (%) | 18.21% | 19.60% | — | — |
| Interest | ₹42 cr | ₹45 cr | -7.09% | +1.55% |
| Depreciation | ₹401 cr | ₹394 cr | +1.83% | +27.19% |
| Profit before tax | ₹645 cr | ₹702 cr | -8.11% | +11.98% |
| Tax | ₹155 cr | ₹170 cr | -8.71% | +24.08% |
| Net profit | ₹490 cr | ₹532 cr | -7.92% | +8.63% |
| EPS (₹) | ₹9.18 | ₹9.97 | -7.92% | -27.60% |
Operating margin of 18.21% compares with a Consumer Discretionary sector median of 12.62% across 102 peers that have reported Q2FY27.
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 mid-single digits in Q2FY27.
- Emerging categories including beauty and personal care, innerwear and footwear contributed over 21% of revenues.
Guidance & outlook
- The company says the outlook for organised fashion retail remains encouraging, supported by formalisation and higher consumer aspirations.
- The company expects annual new-store openings to remain broadly consistent, although quarterly openings may vary.
- The company believes stable pricing, efficiency improvements and a relatively stable margin profile should improve brand salience.
Expansion
- During the quarter, the company opened its 1000th Zudio store and operated over 1,300 large-box fashion stores across 339 cities.
- In Q2FY27, the company opened 10 Westside stores and 19 Zudio stores, while consolidating two Zudio stores.
- The company is investing in new stores, store refreshes, warehousing, supply-chain infrastructure, automation and technology.
- Star added one store during the quarter, reaching 87 stores across 13 cities.
New products
- Westside's event presented 80 curated Autumn/Winter/Festive looks and debuted its second YNG designer collection.
New initiatives
- The company is deploying AI tools and analytical models to improve performance, productivity, and revenue, cost and capital optimisation.
- The company is accelerating the deployment and integration of multiple AI and digital initiatives over the near to medium term.
- Structural cost optimisation and operating-efficiency improvements are a significant strategic agenda and performance lever.
- Westside's YNG programme supports and nurtures India's next generation of fashion creators.
- The CARA programme supported 1,338 tribal farming households across 30 Gujarat villages in adopting regenerative agricultural practices.
Competition
- The company says its own-brand and direct-to-consumer model enables it to differentiate the customer value proposition.
Problems & risks
- Inflation remains elevated across line items, with geopolitical conditions, interest rates and supply-chain disruptions contributing to the pressure.
- The company says fashion and lifestyle competition has remained intense over the past few years, with no material recent shift.
- Newer and secondary markets have attractive growth potential but have relatively longer maturity profiles.
What to watch
- Whether operating margin recovers from 18.21% after the 1.39-percentage-point QoQ decline.
- Whether expense growth falls below revenue growth after +3.91% versus +2.14% in Q2FY27.
- Whether store additions remain consistent with 19 Zudio and 10 Westside openings in Q2FY27.