Why Did Trent Shares Crash Up to 11% Today?

Synopsis: Trent’s Q1 updates disappointed investors due to slower-than-expected growth. However, most brokerages believe the company has good long-term growth potential, while Citi remains cautious because of increasing competition and slower store performance.

This Tata Group Stock, engaged in retailing apparel, footwear, accessories, beauty products, and groceries through brands such as Westside, Zudio, Star Bazaar, and other lifestyle retail formats across India, crashed 10.64 percent in today’s intraday trade. In this article, we will explore the reasons for the stock’s fall.

With a market capitalization of Rs. 1,59,204.47 crores, the share of Trent Limited has reached an intraday low of Rs. 2,987.65 per equity share, down nearly 10.64 percent from its previous day’s close price of Rs. 3,343.40. Since then, the stock has retreated and is currently trading at Rs. 2988.35 per equity share. 

Reason Behind the Crash?

Trent Limited’s stock came under selling pressure after the company reported 19 percent year-on-year revenue growth in the first quarter (Q1). Although this was higher than the 17 percent, 16 percent, and 20 percent growth reported in Q2, Q3, and Q4, respectively, it was below analysts’ expectations. Citi had estimated 23 percent revenue growth, while the market expected growth in the low-to-mid 20 percent range, leading to investor disappointment.

Another concern was the decline in average revenue per square foot, which fell 12.2 percent YoY in Q1. This followed declines of 11.6 percent in Q4 and 16.1 percent in Q3, indicating that existing stores are generating lower sales. During the quarter, Trent added 1 net Westside store and 19 net Zudio stores, compared with Citi’s estimates of 0 Westside and 6 Zudio stores.

Analysts believe the slowdown in sales growth, rising competition, store cannibalisation, and expansion into Tier II and Tier III cities could affect Trent’s near-term performance. Macquarie also noted that same-store sales growth moderated from Q4 levels. However, analysts remain optimistic that Trent’s value-focused brands and improving consumer demand could help the company achieve stronger growth in the coming quarters.

Company Update (Q1 FY27):

Trent Limited reported a strong 19 percent year-on-year growth in standalone revenue for Q1FY27, with revenue increasing to Rs. 5,666 crore from Rs. 4,781 crore in the corresponding quarter last year. Revenue from the sale of merchandise also grew by 19 percent, indicating healthy customer demand and steady business momentum across its retail formats.

The company continued to expand its store network during the quarter by adding 20 net stores, including 1 Westside and 19 Zudio outlets. As of June 30, 2026, Trent operated a total of 1,312 stores, comprising 301 Westside, 982 Zudio stores (including 7 in the UAE), and 29 stores across other lifestyle concepts, supporting its long-term growth strategy.

Brokerage Viewpoint after Q1 Updates:

Macquarie, a prominent brokerage firm, has recommended a “Outperform” call on Trent Limited with a target price of Rs. 3,600 per share, indicating an upside potential of 20.60 percent from its current price of Rs. 2,985. 

Macquarie has maintained its Outperform rating on Trent despite expecting weaker-than-expected sales growth in Q1FY27. The brokerage believes same-store sales growth has moderated compared with Q4, which could weigh on the company’s near-term performance. However, it views this slowdown as temporary rather than structural.

Macquarie remains positive on Trent’s long-term outlook, supported by its strong value positioning and expanding store network. The brokerage expects improving consumer demand to drive a recovery in sales growth over the coming quarters. This combination of a strong retail franchise and favourable demand trends underpins its positive view on the stock despite near-term challenges.

Similarly, Citi has recommended a “Sell” call on Trent Limited with a target price of Rs. 2,733 per share, indicating a downside potential of 8.44 percent from its current price of Rs. 2,985. 

Citi has maintained its Sell rating on Trent, noting that Q1FY27 revenue growth moderated despite a favourable base. The brokerage remains cautious due to the continued weakness in revenue per square foot, which indicates slower store productivity. It also highlighted rising competition, the impact of cannibalisation from rapid store expansion, and increasing presence in tier-2 and tier-3 cities as factors that could weigh on the company’s growth and profitability going forward.

Additionally, Morgan Stanley, a prominent brokerage firm, has recommended a “Outperform” call on Trent Limited with a target price of Rs. 3,151 per share, indicating an upside potential of 5.56 percent from its current price of Rs. 2,985. 

Morgan Stanley has maintained its Overweight rating on Trent despite a slightly weaker-than-expected Q1FY27 performance. The brokerage noted that revenue growth came in below its 21 percent estimate, while the pace of store additions also moderated during the quarter. These factors could keep the stock under pressure in the near term.

However, Morgan Stanley remains positive on the company as it expects the standalone EBITDA margin to improve by 100 basis points year-on-year to 18.5 percent in Q1FY27. The expected improvement in profitability, along with Trent’s strong retail franchise, supports the brokerage’s positive long-term outlook despite short-term growth moderation.

Further, Bernstein has recommended a “Outperform” call on Trent Limited with a target price of Rs. 3,500  per share, indicating a downside potential of 17.25 percent from its current price of Rs. 2,985. 

Bernstein has maintained its Outperform rating on Trent despite the company’s Q1FY27 revenue missing its expectations. The brokerage believes that around 20 percent growth is becoming the new normal for the business, and any meaningful acceleration from this level will likely depend on a sustained improvement in urban consumer demand.

Bernstein also noted that UPI transaction data for April and May points to softer value growth in the fashion segment, indicating some moderation in consumer spending. As a result, it expects the stock to react negatively in the near term. However, the brokerage continues to remain positive on Trent’s long-term growth prospects.

Company Overview:

Trent Limited is one of India’s largest organized retail companies and a key member of the Tata Group. Headquartered in Mumbai, it operates a portfolio of fashion, lifestyle, and grocery retail formats, with brands such as Westside and Zudio driving much of its growth. 

The company has become one of the most closely watched retailers in India due to its rapid store expansion, strong private-label strategy, and growing presence across both major cities and smaller towns.

Recent Quarter Results:

Coming into financial highlights, Trent Limited’s revenue has increased from Rs. 4,217 crore in Q4 FY25 to Rs. 5,028 crore in Q4 FY26, which has grown by 19.23 percent. The net profit has also grown by 32.37 percent from Rs. 312 crore in Q4 FY25 to Rs. 413 crore in Q4 FY26.

Trent Limited’s revenue and net profit have grown at a CAGR of 51 percent and 69 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 28.3 percent and 27.7 percent, respectively. Trent Limited has an earnings per share (EPS) of Rs. 32.2, and its debt-to-equity ratio is 0.37x.

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