Trent Surpasses D-Mart's Parent Company Avenue Supermarts in Retail Market

In a significant shift in India’s retail sector, Trent, owned by Tata Group, has overtaken Avenue Supermarts, the parent company of D-Mart, in terms of market capitalization. This development comes on the back of a stellar performance by Trent’s shares, which have soared over 170% since the start of the year, while Avenue Supermarts has seen its stock value drop by over 20% since its peak in September 2024.

As of Monday, Trent’s market value is nearing ₹73,000 crore, surpassing Avenue Supermarts by a margin of nearly ₹20,000 crore. The decline in Avenue Supermarts’ stock can be attributed to a disappointing September quarter performance, where its earnings failed to meet market expectations. This has resulted in a series of downgrades from analysts, further weighing on the company’s stock price.

It’s worth noting that Avenue Supermarts was valued at around ₹40,000 crore when it listed in March 2017. At its peak in October 2021, the gap between D-Mart and Trent’s valuations was over ₹3 lakh crore, with Avenue Supermarts holding a commanding lead. However, the tables have turned as Trent’s aggressive expansion strategy and strong performance have helped it bridge and surpass this gap.

Trent, known for its Zudio brand, has been expanding rapidly, opening 193 new Zudio stores in the previous financial year, bringing its total outlet count to 545 across 164 cities in India. This robust growth has translated into a threefold increase in Trent’s net profit, which reached ₹1,487 crore, alongside a 50% surge in revenue, which stood at ₹12,368 crore for the year.

Meanwhile, Avenue Supermarts, despite its strong reputation as a hypermarket chain, has struggled to keep pace. While D-Mart was once a dominant force in the retail sector, its market momentum has slowed, leading to a more modest year-to-date gain of just 3%.

Trent’s success has not gone unnoticed by analysts. Brokerage firm Citi recently initiated coverage on Trent, giving it a "buy" rating with a price target of ₹9,250 per share, the highest on the street. Citi expects Trent’s revenue and net profit to grow at a compounded annual growth rate (CAGR) of 41% and 56%, respectively, over the next three years.

In addition to its retail operations, Trent is also making strategic moves in the jewellery market. Last week, the company launched a lab-grown diamond (LGD) brand called 'Pome,' which is available in select Westside stores. Analysts at Kotak Institutional Equities have expressed optimism about the potential of Pome, comparing its future prospects to Zudio’s dominance in the value fashion segment. They expect Pome to scale rapidly in the coming years.

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On the other hand, Avenue Supermarts’ stock remains under pressure. As of today, shares of Avenue Supermarts are down 8.5%, trading at ₹4,186.6, while Trent’s shares are up slightly, trading at ₹8,270.

This shift in market leadership highlights the evolving dynamics in India’s retail sector. As consumer preferences continue to evolve, companies like Trent that can adapt and expand efficiently are poised to capture a larger share of the market. In the coming years, intense competition will likely be seen between these retail giants, each vying for dominance in an increasingly competitive landscape.

[Disclaimer: This blog is intended for informational purposes only and should not be considered financial advice. All investments carry risks, and you should conduct your own research before making any investment decisions.]