Shares of Tata Group's fashion retailer, Trent Ltd., experienced a significant downturn in Tuesday's trading, plummeting over 12% to hit a low of Rs 2,939.50. This sharp decline followed the company's release of its business update for the June quarter (Q1 FY27), which revealed revenue growth that fell short of analyst projections.
Q1 FY27 Performance Details
Motilal Oswal Financial Services (MOFSL) reported that Trent's standalone revenue for Q1 FY27 stood at Rs 5,670 crore, marking an approximately 19% year-on-year (YoY) increase. However, this growth was slightly below MOFSL's expectation of around 22% YoY. The brokerage noted that while revenue growth was largely supported by a roughly 26% YoY increase in store count, revenue per store actually declined by about 5% YoY.
This decline in revenue per store, following a 4% fall in Q4 FY26, suggests either a slower ramp-up for newer stores or ongoing cannibalisation effects on existing outlets. Trent added 26 new stores during Q1 FY27, bringing its total fashion-format store count to 1,312. Specifically, Westside added one net store to reach 301, and Zudio expanded by 19 net stores to 982 outlets.
Analyst Insights and Technical Outlook
Following Trent's softer-than-expected revenue figures, MOFSL indicated that it anticipates the stock will undergo a correction. Other analysts offered varied perspectives:
WealthMills Securities
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, observed that the stock, which had been consolidating for several months, saw a sharp decline post-update. He suggested that long-term investors might consider accumulating the stock on further declines, though he cautioned that valuations remain elevated in the short to medium term.
Angel One
Osho Krishan, Chief Manager - Technical & Derivative Research at Angel One, noted that despite the steep fall, Trent's stock continues to trade above both its 200-day Simple Moving Average (DSMA) and its breakout neckline, indicating that the broader technical structure remains intact. However, he warned that the negative price reaction has weakened near-term momentum, suggesting potential for additional corrective moves. Krishan identified the 2,900–2,830 zone as a crucial support area, stating that the medium-term outlook remains constructive as long as the stock sustains above this range.
Tips2trades
AR Ramachandran, a Sebi-registered research analyst at Tips22trades, highlighted that the stock is currently bearish on daily charts, with strong resistance identified at Rs 3,105. He added that a daily close below the support level of Rs 2,905 could trigger a further fall towards Rs 2,835 in the near term.
Bonanza
Virat Jagad, Senior Technical Research Analyst at Bonanza, concurred with the bearish sentiment, stating that Trent is showing bearish price action. He advised against initiating fresh positions due to the severe breakdown and recommended that existing positions be maintained with a strict stop loss of Rs 2,890.
Investors are advised to consult with a qualified financial advisor before making any investment decisions, as market movements can be volatile and unpredictable.