Shares of Trent Ltd., a prominent Tata group retail entity, experienced a significant downturn on Tuesday, plummeting nearly 10% on the BSE. The stock hit a low of Rs 3,010.10, cutting its year-to-date gains to 6.49%.
The sharp decline followed the company's provisional business update for the June quarter (Q1), which revealed a 19% year-on-year (YoY) revenue growth. This figure disappointed market analysts, who had largely anticipated a stronger 22% growth for the period.
Analysts Point to Weaker-Than-Expected Performance
SBI Securities noted that Trent's revenue growth was "weaker than expected" and likely to have a "negative" short-term impact on the stock. Similarly, Nuvama Institutional Equities, which had projected a 22% YoY top-line expansion driven by positive same-store sales, had also factored in potential Ebitda margin compression due to higher new lease costs and slower productivity.
MOFSL echoed these sentiments, confirming that Trent's standalone Q1 revenue of 19% YoY fell short of its own 22% growth estimate. The brokerage highlighted that while growth was primarily fueled by a 26% YoY increase in store count, revenue per store actually declined by 5% YoY. This marked a further dip from the 4% YoY decline observed in the March quarter, suggesting either a slower ramp-up for newer stores or ongoing cannibalization effects on existing outlets.
Store Expansion Continues Amid Revenue Concerns
Despite the revenue slowdown, Trent continued its aggressive store expansion strategy during the June quarter. The company added 26 new stores across its fashion formats, bringing the total count to 1,312, a 26% increase year-on-year.
- Westside, one of Trent's flagship brands, added one net store, reaching a total of 301 outlets (up 21% YoY).
- Zudio, the value fashion chain, saw 19 net store openings, expanding its footprint to 982 stores (up 28% YoY).
- Other fashion formats increased by six quarter-on-quarter, totaling 29 stores, remaining flat year-on-year.
Market Correction After Recent Gains
The recent share price correction comes after a period of significant gains for Trent. The scrip had surged 23% over the past month and an impressive 50% from its March 2026 lows, largely on expectations of an acceleration in revenue growth. However, the 19% provisional growth for Q1 was weaker than the 20% YoY growth reported for the preceding March quarter, leading analysts to anticipate a correction in the stock's valuation.