MUMBAI: Shares of Tata Group’s flagship retail arm, Trent Ltd, crashed by nearly 9% in early trade on Tuesday after the company reported its financial results for the first quarter ended June 30. While the company recorded solid numbers on a yearly basis, the revenue growth marginally missed strict street expectations, triggering a sharp wave of profit-booking and leaving top global brokerages highly divided over its future trajectory.
The Q1 Numbers at a Glance
Standalone Revenue: Stood at ₹5,666 crore, marking a 19% year-on-year (YoY) increase compared to ₹4,781 crore in the same quarter last year.
Store Footprint: Trent added 20 new physical stores during the quarter (1 Westside and 19 Zudio outlets), bringing its grand retail footprint to 1,312 stores nationwide.
Despite the stable 19% growth, market experts pointed out that the pace of Westside expansion has slowed down, and the overall numbers sat just a notch below aggressive analyst estimates, raising concerns over its current premium valuations.
How Brokerages View the Stock Now
The mixed performance has divided major financial firms on whether Trent can sustain its meteoric multi-year rally:
Bernstein (Bullish – ‘Outperform’ | Target: ₹3,500): Bernstein remains confident, maintaining an Outperform stance. It noted that while the Q1 growth was marginally lower and store additions slowed down, the June quarter is historically the weakest period for retail expansion. It sees no structural risk to Trent’s full-year FY27 targets.
Morgan Stanley (Cautious – ‘Equalweight’): The brokerage flagged that near-term upside could be strictly limited. Given the massive stock rally over the last year, the current valuation prices in most of the positives, leaving very little room for error.
Citi (Bearish/Cautious): Citi raised concerns over a slight dip in productivity growth alongside intensifying competition in the value-retail segment where Zudio operates.
Market Takeaway: Trent’s long-term growth story remains intact driven by Zudio’s rapid expansion, but the current high Price-to-Earnings (P/E) multiple means any quarterly miss will trigger sharp short-term volatility.
