Trent shares see price target cut after soft revenue growth in Q2

Shares of Tata Group company Trent Ltd. will be in focus on Monday, November 10, after the company reported its September quarter results.

Trent's revenue growth remained soft in the quarter, as per its second quarter update. Reported EBITDA rose 26.5%, while operating EBITDA grew 14% year-on-year.

The company said profit after tax was lower, primarily due to higher depreciation expenses.

Trent said that consumer sentiment remained relatively subdued during the quarter, impacting overall sales momentum.

The retailer continued to expand its footprint in Q2 FY26, opening 19 new Westside stores and closing six, while adding 44 new Zudio stores and shutting four, including one in the United Arab Emirates.

Brokerages turn cautious

Several brokerages have turned cautious on Trent following its quarterly update, citing moderating growth trends and rising competition.

Citi downgraded the stock to 'Sell' and sharply reduced its price target to ₹4,350 from ₹7,150 earlier.

The brokerage said that with overall consumption trends remaining weak, coupled with increasing competition, cannibalisation, and aggressive expansion in Tier-2 and Tier-3 markets, Trent's growth rate is likely to moderate further.

Citi also cut its FY26-FY28 revenue estimates by 6-19% and EBITDA estimates by 2-12%, while lowering its target EV/EBITDA multiple to 40x (September 2027E) from 50x (June 2027E).

Goldman Sachs maintained a 'Neutral' rating but reduced its price target to ₹4,920.

It said operating EBIT growth of 9% year-on-year in the second quarter was below expectations, as sales were impacted by unseasonal rains and consumers prioritising big-ticket purchases following the GST rate reduction.

Goldman added that the company's automation investments are helping limit the profitability impact despite weak like-for-like (LFL) growth, though margin benefits are likely to be absorbed in the base by the fourth quarter. The brokerage cut its earnings estimates by around 6%.

Jefferies, which holds a 'Hold' rating, also reduced its price target to ₹5,000. It said that revenue growth decelerated to 17%, marking a multi-quarter low.

Operating EBITDA margins remained nearly flat, resulting in growth that was broadly in line with revenue. While gross margins declined, the impact was offset by lower staff and other costs, supported by productivity and automation initiatives.

Jefferies said store additions picked up sequentially, but like-for-like growth in fashion remained in low single digits, even as non-apparel categories and online sales through Westside continued to gain traction.

Trent shares ended Friday's session 1.30% lower at ₹4,618.50. The stock is down nearly 2% in the last one month and 35% on a year-to-date basis.