Trent shares fall 12%, most in a year after Q1 topline miss; analysts cautious

Shares of Tata Group's Trent Ltd. are trading 12% lower on Tuesday, July 7, the most in a year, after the retailer reported June quarter revenue growth that fell marginally short of Street expectations.

Trent's standalone revenue rose 19% year-on-year to ₹5,666 crore in the first quarter of FY27, compared with ₹4,781 crore a year earlier. Analysts were expecting revenue growth of around 20-22%.



During the quarter, the company expanded its retail footprint by opening one Westside store and 19 Zudio stores.

The latest business update indicates that Trent's growth momentum remains broadly stable. Revenue growth has stayed within the 17-20% range over the past five quarters, with growth of 19% in Q1 FY27 following 20% in the March quarter.

Here's what brokerages are saying

Morgan Stanley has maintained an 'Overweight' rating on Trent with a price target of ₹3,151. The brokerage said that Trent's standalone revenue grew 19% year-on-year in the June quarter, marginally below its estimate of 21%, and broadly in line with the 20% growth reported in the previous quarter.

Store expansion moderated during the quarter, with Trent adding 19 Zudio stores and one Westside outlet, following a stronger expansion in the March quarter.

Despite the softer revenue growth, Morgan Stanley expects Trent's standalone EBITDA margin to improve by around 100 basis points year-on-year to 18.5%.

The brokerage added that after the stock's 20% rally over the past month, the slightly weaker-than-expected business update could lead to some near-term profit booking.

Bernstein has an 'Outperform' rating on Trent and a price target of ₹3,500. The brokerage said that standalone revenue growth of 19% for the June quarter was marginally below its expectation of 20.5%.

While Zudio added 19 stores, Westside expanded by just one outlet during the quarter. Although store additions were lower than Bernstein's estimates and below the pace seen in the year-ago period, the brokerage said that the June quarter is typically the slowest for store openings and does not see this as a concern for achieving the company's FY27 expansion targets.

Citi has maintained its 'Sell' rating on Trent with a target price of ₹2,733.

The brokerage said that standalone revenue increased 19% year-on-year, missing its estimate of 23%. It also pointed to continued weakness in revenue per square foot, which it estimates declined over 12% from a year ago despite a favourable base.

While acknowledging that the June quarter is seasonally weak for store additions, Citi remains cautious on the stock due to persistent pressure on store productivity, rising competition, the impact of store cannibalisation, and the company's aggressive expansion into tier-2 and tier-3 markets.

According to Bloomberg data, 20 of the 27 analysts tracking Trent have a 'Buy' rating on the stock, while five recommend 'Hold' and two have a 'Sell' rating.

Trent shares ended Monday's session marginally lower at ₹3,340.10. The stock has rallied 22% over the past month.