.png){kind=logo}
Shares of Trent Ltd, the Tata Group’s retail arm and parent company of Westside and Zudio, fell nearly 7% in early trade on November 10, after the company reported slower-than-expected Q2 FY26 results.
The stock dropped to a 52-week low of Rs. 4,326.5 on the BSE as investors reacted to muted growth in the company’s Star Bazaar business and moderation in same-store sales.
Despite posting an 11% YoY rise in consolidated net profit for the September quarter, its expansion fell short of expectations.
Revenue from operations increased 17% YoY to Rs. 4,724 crore from Rs. 4,036 crore in the same quarter previous year, which was Trent's slowest quarterly revenue growth since March 2021.
Net profit stood at Rs. 451 crore, up from Rs. 423.44 crore a year earlier, while operating profit rose 16% to Rs. 575 crore.
The company’s EBIT margin slipped to 10.2% from 11% last year, highlighting pressure from higher costs and weak consumer sentiment.
Westside continued its steady performance; however, the value fashion businesses Zudio and Star Bazaar experienced modest improvement.
Star's revenue declined 2% YoY due to ongoing upgrades to existing stores, while Zudio's extension into Tier-2 and Tier-3 cities resulted in lower productivity growth.
In addition, analysts estimated that gross margins were approximately 88 basis points lower YoY, primarily due to an increased mix of value fashion offerings.
Motilal Oswal retained its ‘Buy’ rating with a target price of Rs. 6,000, implying a 30% upside from current levels. The firm expects Trent’s revenue, EBITDA, and PAT to grow at a CAGR of 17%, 20%, and 14%, respectively, over FY25-28.
Nuvama Institutional Equities, however, maintained a ‘Hold’ rating with a revised target of Rs. 5,189 (down from Rs. 5,850). It warned that the company’s expansion into smaller cities could dampen profitability.
Morgan Stanley maintained its Overweight rating and set a target of Rs. 5,456, referring to Trent’s strong brand and store network, also pointing out short-term demand challenges.
Citi was the most bearish, lowering the stock's rating to ‘Sell’ and cutting its target price to Rs. 4,350 due to rising competition.
Also Read: Stock Market Today: Sensex at 83,651, Nifty at 25,623; FIIs Buy Rs. 4,581 Crore Worth of Shares
In saying that, although Trent has been overseeing significant store expansion, cost-cutting initiatives, and product category diversification, the short-term weaknesses of weak demand, margin pressure, and execution risk could continue to pressure the stock.
Trent’s shares fell more than 20% in the last six months and nearly 38% in 2025, trading at a P/E ratio of 108x.
Brokerages noted that while the current multiple indicates credibility in Trent’s brand position, consistent profit growth will be critical for the stock to regain momentum.
