Talking to ET Now, Taurani said Trent’s expected revenue growth has moderated to 15–17% from the earlier 20–25% band, primarily due to weak like-for-like (LFL) growth of 2–3%. While store additions, particularly for Zudio, remain on track, throughput in newer non-metro stores has been lower, hurting overall performance.
He added that intensifying competition in fast fashion is eroding Zudio’s market share, with multiple new entrants and existing players expanding aggressively. Acceptance of the category in smaller towns has also been slower than anticipated, putting pressure on same-store sales.
Margin risk remains key overhang for Trent
Trent’s EBITDA margins have remained stable at around 16–16.5%, but Taurani warned of downside risks. If the company invests in improving product quality to counter competitors, margins could decline by 100–150 basis points over the next few quarters. Any margin compression could trigger further earnings downgrades and make valuations appear stretched again.
Currently, Trent trades at around 54x FY28 price-to-earnings, significantly lower than its peak multiples but still vulnerable if growth fails to rebound.
DMart better placed, but online shift a structural risk
On Avenue Supermarts, Taurani said performance has been relatively better, with no major negative surprises. However, LFL growth has slowed to around 5% due to the rapid expansion of quick commerce and online grocery platforms.
Store additions remain DMart’s key growth driver, and competitive intensity is lower than in fashion retail. Taurani believes margin risks for DMart are largely behind, but structural challenges from digital channels could cap long-term growth below 20%.
Nykaa, Jubilant preferred within discretionary space
In beauty and personal care, FSN E‑Commerce Ventures continues to post strong growth of over 25%, aided by limited competition in online BPC. Fashion losses are narrowing, and the segment is expected to reach breakeven over the next few quarters, though margin risks from quick commerce and faster e-commerce deliveries remain.
Within QSR, Taurani reiterated a positive view on Jubilant FoodWorks, citing stable like-for-like growth, strong delivery exposure and improving margins. He said valuation re-rating would hinge on EBITDA margins rising towards the 21–22% range.
Overall, Taurani said investors may find better risk-reward in select value retail, QSR and platform-led consumption plays, while large format fashion retailers face near-term headwinds from competition, margin pressure and changing consumer behaviour.