Trent Target Cut After GST Impact Concerns

Shares of Tata Group company Trent Ltd. were trading lower on Thursday, September 11, after brokerage firm Kotak Institutional Equities maintained a ‘Reduce’ rating on the stock.

Kotak cut its target

price on Trent to ₹4,900 from ₹5,300 earlier.

The brokerage wrote in its note that while the Goods and Services Tax (GST) cuts will have a positive impact, they apply to only a relatively small portion of Trent’s sales and may therefore have a limited effect on near-term revenue growth.

The report added that Trent continues to expand its store footprint in existing cities, which could keep same-store sales growth under pressure in the short term.

However, operating margins are expected to remain

resilient, as the company benefits from its organisation-wide adoption of radio-frequency identification (RFID), which has improved employee cost efficiency.

Kotak also trimmed its earnings per share (EPS) estimates for FY2026-28 by 3-7%.

Trent reported its June quarter results recently, beating street estimates on all key metrics. The net profit for the quarter came in at ₹424.7 crore, up 8.5% year-on-year. Revenue grew 19% to ₹4,883 crore.

Operating performance was particularly robust, with EBITDA

rising 38% year-on-year to ₹848 crore. Margins expanded to 17.3% from 15% last year, defying estimates that had projected a decline to 14.2%.

Of the 25 analysts that have coverage on Trent, 15 of them have a 'Buy' rating, while five each have a 'Hold' and a 'Sell' recommendation on the stock.

Trent shares are currently trading 0.31% lower on Thursday at rs 5,175. The stock is down 27% so far this year.