Trent’s Wild Ride: The Story Behind the 5% Surge Despite a 55% Profit Crash
Imagine this: You’re watching a cricket match. Your favorite team is trailing badly, but suddenly, one batsman starts hitting sixes like there’s no tomorrow. The crowd goes wild. Confused, thrilled, anxious — all at once.
That’s what investors felt watching Trent’s stock jump nearly 5% despite posting a 55% drop in quarterly profit. How does a stock rally when the scoreboard looks grim?
Let’s dig into this twisty tale of Tata’s retail arm, its fast-fashion gamble with Zudio, and why the market is still cheering — for now.
Q4 FY25: Numbers That Tell Two Different Stories
| Metrics | Q4 FY25 | Change YoY | Change QoQ |
|---|---|---|---|
| Net Profit | ₹318 crore | 🔻 55% | 🔻 36% |
| Revenue | ₹4,217 crore | 🔺 28% | Moderate Growth |
| Operating Margins | Declined | Due to Zudio Mix | Under Pressure |
If you just glance at the net profit, it feels like the ship is sinking. But dig deeper, and revenue tells a different story — a 28% rise year-on-year.
So what’s really happening?
Zudio: The Double-Edged Sword
Zudio is like that young, energetic recruit in a company who works fast, gets a ton of attention, but hasn’t yet learned how to generate consistent profits.
Why Zudio Is Making Waves:
- Rapid expansion across Tier-2 and Tier-3 cities
- Affordable fashion targeting youth and budget-conscious buyers
- Riding India’s fast-growing value retail segment
But What’s the Catch?
- Lower margins: Zudio’s affordable pricing means less profit per item.
- Heavy discounting: To drive volumes, discounts are deep, further eating into profits.
- Same-Store Sales Growth (SSSG) slowing: A worrying sign in retail.
Zudio now accounts for a major chunk of Trent’s retail footprint. But as its share grows, it drags down the company’s overall profitability — like mixing too much water into a strong cup of coffee.
Investors’ Dilemma: Growth or Profitability?
Trent is stuck between a rock and a runway — scale vs. stability.
Recent Stock Performance:
- Down 23.3% YTD (as of Feb 10)
- Down 31.48% in the last 6 months (as of Mar 10)
This isn’t just a hiccup — it’s been one of the biggest value losers in early 2025.
But then — Boom! A 5% rally on April 29.
Why? Because revenue came in stronger than expected. For a moment, investors saw light at the end of the tunnel.
But reality hit soon after — concerns over margin erosion and sluggish ‘Star’ segment growth brought the party to a halt.
Is This a Smart Turnaround or Just a Sugar Rush?
Trent’s current playbook reminds us of companies like H&M and Uniqlo during their hyper-expansion phases. Rapid growth, low-cost fashion, and hopes of brand loyalty driving volume.
But there’s one key difference — those brands operated in relatively saturated, stable markets. Trent is navigating India’s dynamic, unpredictable consumer landscape.
Risks to Watch:
- Rising competition: Reliance, Aditya Birla, and even global players are eyeing fast fashion.
- Inflation impact: Will low-income customers continue spending?
- Operational stress: Can Trent maintain supply chain efficiency with rapid store additions?
Zudio vs. Profitability: Can They Coexist?
Here’s where the real story lies: Can Trent crack the code of profitable fast-fashion scale in India?
If they can balance volume with margin, and turn Zudio into not just a crowd-puller but a cash generator — this could be a long-term multi-bagger stock.
If not? We could be watching a classic case of “too much, too soon.”
Quick Recap: What Investors Should Know
- Net Profit fell 55% YoY in Q4 FY25
- Revenue jumped 28%, thanks to Zudio’s expansion
- Zudio is growing fast, but hurting margins
- Investors are watching how Trent balances scale and sustainability
FAQs (Featured Snippet Friendly)
Why did Trent’s stock rise despite poor profit numbers?
Trent’s stock rose due to stronger-than-expected revenue and investor optimism around Zudio’s long-term growth potential.
Is Zudio profitable for Trent?
Not fully yet. Zudio brings in revenue but operates on thin margins, which impacts overall profitability.
What is dragging down Trent’s profits?
Aggressive expansion, heavy discounting, and a growing share of low-margin Zudio stores are putting pressure on margins.
Is Trent a good investment in 2025?
It depends. If Zudio’s growth becomes profitable and margin pressures ease, it could offer strong returns. But near-term risks remain.