Trent Q2 FY27 Results Analysis: EBITDA Jumps 32%, Margin Expands 140 bps
Trent Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 5,873.14 Cr (+21.91% YoY) and PAT growth of +23.06% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 29, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 5,873.14 Cr (+21.91% YoY) |
| PAT (Q2) | Rs. 463.77 Cr (+23.06% YoY) |
| EBITDA margin | 18.36% (+140 bps YoY) |
| EPS (Q2) | Rs. 8.70 (+23.06% YoY) |
| Market cap | Rs. 152,904.69 Cr |
| CMP | Rs. 2,861.70 |
Quarter Snapshot
Trent delivered 21.91% consolidated revenue growth with EBITDA up 31.94% and margin expansion of 140 bps YoY, running at more than double the ~9% apparel industry growth rate. Earnings are fully cash-backed (CFO/PAT 1.51×) with positive free cash flow of Rs.788.75 Cr funding the store rollout while the company deleverages (debt-equity 0.30). Key watch items are the rising effective tax rate (+268 bps), a widening JV/associate loss of Rs.21.06 Cr, and employee/D&A costs growing faster than revenue.
Key Investment Insights
Key Positives
- Consolidated revenue grew 21.91% YoY to Rs.5,873.14 Cr; standalone revenue grew 22.51% to Rs.5,787.64 Cr, reconciling with the 5 October business update of Rs.5,788 Cr (+23%)
- Consolidated EBITDA grew 31.94% YoY to Rs.1,078.09 Cr with margin expansion of 140 bps YoY to 18.36%
- Owners' PAT grew 23.06% YoY to Rs.463.77 Cr; EPS grew 23.06% to Rs.8.70 (post-bonus)
- Merchandise-cost ratio improved 121 bps YoY standalone despite flagged input-cost escalation; other expenses grew slowest of all cost lines (+15.56%)
- H1 CFO/PAT of 1.51× and free cash flow of +Rs.788.75 Cr; rollout self-funded while deleveraging (debt-equity 0.30 vs 0.38 YoY)
- 27 net store additions in Q2 (Westside 10, Zudio 17) took the portfolio to 1,342 stores; Zudio crossed 1,000 stores on 11 September 2026
- Revenue growth of ~22% ran at more than double the RAI-measured ~9% apparel industry growth rate
- Rs.500 Cr FY22 NCDs redeemed on 29 May 2026; finance costs grew only 6.39% YoY, well below revenue growth
Risk Factors
- Effective tax rate rose to 24.39% from 21.71% (+268 bps), with total tax up 45.78% YoY — the main wedge between EBITDA growth (+31.94%) and PAT growth (+23.06%)
- Share in loss of Associates/JVs widened to Rs.(21.06) Cr from Rs.(1.10) Cr a year ago (Rs.19.96 Cr worse), with one JV's quarterly share of loss at Rs.21.88 Cr
- Employee cost grew 36.04% YoY standalone (including a new Rs.14.17 Cr H1 ESOP charge) and D&A grew 29.20% consolidated, both outpacing revenue growth
- Standalone PAT grew only 8.62% YoY against 22.51% revenue growth, distorted by a Rs.101.47 Cr year-ago property-sale gain in the base and higher ETR
- Inventory build of Rs.551.57 Cr (H1) absorbed operating cash, with CFO declining to Rs.1,485.58 Cr from Rs.1,532.39 Cr
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.