Shares of Tata Group’s retail arm Trent Ltd are in the spotlight on Friday, June 20, after global brokerage HSBC initiated coverage with a ‘buy’ rating and a price target of Rs 6,700, implying a potential upside of 17 per cent from the last close of Rs 5,723 on the NSE. The stock has corrected nearly 20 per cent year-to-date, but analysts believe the downside may be overdone given strong expansion tailwinds.

HSBC’s optimism stems from Trent’s aggressive store expansion strategy, particularly for value retail brand Zudio, which is expected to add nearly 200 stores annually between FY25 and FY28. The brokerage also flagged the reimagined Westside format and the launch of Zudio Beauty as key levers for revenue acceleration.

In its note, HSBC pointed out that competition risk in the affordable fashion segment remains low, and Trent’s price-to-earnings ratio of 2.4x offers a significant valuation comfort versus peers like V-Mart, Page Industries, and Aditya Birla Fashion, while delivering better growth and profitability metrics.

Trent has now received three bullish brokerage calls in as many days. On Thursday, Macquarie retained its ‘Outperform’ rating, citing the company’s long-term vision of achieving 25 per cent annual sales growth over the next decade. The strategy includes expansion into adjacent categories, maintaining leaner operations, and a robust store-level profitability model.

Earlier this week, Morgan Stanley reaffirmed its ‘Overweight’ rating, citing management’s confidence in 10x revenue growth by FY32. The firm noted that Trent’s new stores tend to achieve strong throughput within 12–24 months of launch, validating the scalability of the model.

Backing up the positive sentiment is Trent’s robust Q4 FY25 performance. The company posted a 37 per cent YoY jump in EBITDA to Rs 656 crore, beating Street estimates of Rs 580 crore. Operating margins improved to 16 per cent, underlining better cost efficiency and store-level economics.

With Trent shares down 20 per cent in 2025, analysts believe the correction presents a potential entry point for long-term investors. The backing from three major brokerages within a week adds to confidence in the stock’s retail-driven growth story, especially as consumer demand recovers and organised fashion retail gains more market share.

Investors will be watching Trent’s store expansion execution, same-store sales growth, and margin sustainability as key triggers for the stock in the upcoming quarters.