Trent Shares Fall Nearly 7% After Q2 Results – What Went Wrong for the Tata Group Retail Stock?

Trent shares slipped close to 7% on Monday, November 10, 2025, after the company announced its September quarter (Q2 FY26) results. Even though the Tata Group retailer reported profit growth, the stock dropped sharply as revenue growth came in lower than expected and several brokerage firms cut their target prices.

Let’s understand what led to this fall and what analysts are saying about Trent’s future.

Trent Shares Hit 52-Week Low:

The company’s stock fell as much as 6.8% intraday to ₹4,310 on the BSE, touching its 52-week low before recovering slightly to ₹4,347.10 by late morning.This fall came despite healthy profit growth, showing that investors are worried about slower sales growth and demand challenges.

In the last 12 months, Trent’s stock has dropped almost 31%, and it is down nearly 39% year-to-date. It was also the only Nifty 50 company to hit a new low on the day of results. Traders said market sentiment was weak because revenue growth failed to meet the company’s own guidance of 20–25%.

Q2 FY26 Results: Profit Up, But Growth Slows:

In the second quarter of FY26, Trent’s revenue rose by about 16–17% year-on-year, while net profit increased 11% to ₹373 crore.
Although these are positive numbers, the growth rate was slower than expected.

Analysts said profits were mainly supported by strong cost control measures, not by strong sales. Revenue per store actually dropped, and productivity in new stores was lower than existing ones. Nuvama Research noted that Trent’s revenue per square foot declined by nearly 17%, showing sales cannibalisation between nearby stores.

The company’s operating EBITDA rose by 14%, while reported EBITDA went up 26.5% year-on-year, helped by automation and operational efficiency. However, profit after tax was affected by higher depreciation costs from store expansion and new technology investments.

Expansion Continues Despite Challenges:

Trent is not slowing down its growth plans. During Q2 FY26, the retailer opened 19 new Westside stores and 44 new Zudio stores, while closing six Westside and four Zudio outlets, including one in the UAE.

This aggressive expansion is part of Trent’s long-term plan to reach more customers in Tier-2 and Tier-3 cities. However, analysts warned that new stores take longer to become profitable, which can affect margins in the short term.The expansion strategy could pay off later, but for now, it has added pressure on quarterly performance.

Weak Consumer Demand Affects Sales:

Trent’s management said that consumer sentiment remained muted during the quarter.Unseasonal rains in some regions and a general slowdown in discretionary spending hurt store sales. Analysts also said that after the GST rate cut, many customers spent more on high-value purchases, reducing spending on fashion and lifestyle products.

Despite this, non-apparel categories and online sales from Westside performed well, showing that Trent’s diversification efforts are helping partly offset the slowdown in its core apparel segment.

Brokerages Turn Cautious:

After the Q2 results, multiple global and domestic brokerages downgraded or cut their target prices for Trent.
Here’s what the major firms said:

1. Citi

• Downgraded Trent from ‘Neutral’ to ‘Sell’.
• Cut the target price to ₹4,350 from ₹7,150.
• Cited weak consumption, rising competition, store cannibalisation, and aggressive expansion in smaller cities as major concerns.
• Reduced FY26–FY28 revenue estimates by 6–19% and EBITDA by 2–12%.

2. Goldman Sachs

• Maintained a ‘Neutral’ rating.
• Lowered target price to ₹4,920.
• Said operating EBIT growth of only 9% was below expectations.
• Blamed unseasonal rains and sluggish demand for the performance dip.
• Added that automation investments helped maintain margins but those gains may normalize in coming quarters.

3. Jefferies

• Retained ‘Hold’ rating.
• Cut target price to ₹5,000 from ₹6,000.
• Mentioned that revenue growth of 17% was at a multi-quarter low.
• Pointed out that fashion segment sales grew slowly, while non-apparel and online categories did well.

4. Nuvama Research

• Maintained ‘Hold’ rating but lowered target price to ₹5,189 (from ₹5,850).
• Cut revenue and profit forecasts for FY26–FY27 by around 3–10%.
• Said profit was helped by cost controls, but slower store productivity remains a key challenge.

Overall, analysts agree that Trent has entered a “normalized growth phase” after rapid post-pandemic expansion.
They expect limited near-term upside, though the company’s fundamentals remain strong.

Zara India Stake Sale – Refocusing on Core Brands:

In a separate update, Trent announced that it will sell 15% of its stake in Zara India for ₹150 crore as part of a buyback by Inditex Trent Retail, a joint venture with Spain’s Inditex (Zara’s parent company).Trent will sell 94,900 shares at ₹15,422 each, reducing its stake from 35% to 20%.

This deal values Zara India at around ₹780 crore.Analysts see the move as part of Trent’s portfolio rebalancing, allowing it to focus more on its fast-growing domestic brands like Westside and Zudio. This strategy could help Trent improve margins and strengthen its presence in India’s value-fashion segment.

Analyst Consensus: Mixed Views:

As per Bloomberg data, 27 analysts track Trent stock. Of them, 16 recommend ‘Buy’, 5 suggest ‘Hold’, and 6 advise ‘Sell’.
The average 12-month target price stands near ₹5,454, indicating a possible 25–26% upside from current levels.

However, the recovery depends on how quickly consumer spending and same-store sales growth improve in the coming quarters.
Experts believe that once demand picks up, Trent’s strong brand presence and growing online business could help it bounce back.

What Should Investors Do?

Trent remains a strong long-term retail brand, backed by the Tata Group and a proven business model.
However, in the near term, the company faces challenges such as:

• Slower revenue growth,
• Lower productivity in new stores, and
• Weak consumer sentiment.

Short-term investors may find limited upside until growth stabilizes.
But long-term investors looking at India’s expanding retail market could use this dip to accumulate gradually, especially if the stock remains near its 52-week low.

Final Take: From Fast Growth to Steady Performance:

Trent’s recent results highlight the company’s transition from rapid expansion to steady, sustainable growth.
The near-term outlook looks moderate as sales adjust to post-pandemic consumer trends.
Yet, the company’s focus on automation, online sales, and brand diversification positions it well for future recovery.

While investors may need to stay patient, Trent’s strong fundamentals and brand power remain intact.
In the long run, it continues to be one of India’s most promising retail stories — but one that’s now moving at a steadier pace.

Disclaimer

The information provided in this article is for educational and informational purposes only. It should not be considered investment or financial advice. Stock market investments are subject to market risks—read all scheme-related documents carefully before investing. The author and publisher are not responsible for any financial losses arising from decisions based on this content.

5 Quick Questions (Q&A):

Q1. Why did Trent shares fall after Q2 results?
Ans.Because the company’s revenue growth slowed, and analysts cut their target prices due to weaker demand and expansion challenges.

Q2. What was Trent’s revenue growth in Q2 FY26?
Ans.Revenue rose 16–17% year-on-year, below the company’s own target of 20–25%.

Q3. Which brokerages downgraded Trent?
Ans.Citi downgraded to Sell, while Jefferies, Goldman Sachs, and Nuvama reduced their target prices.

Q4. What is Trent’s new strategy after selling Zara India stake?
Ans.The company is focusing more on domestic retail brands like Westside and Zudio, which are growing faster.

Q5. What is the outlook for Trent stock?
Ans.Analysts expect steady mid-teens growth ahead but limited short-term upside until demand improves.

 

 

Related Artical :-Click Here