Trent Share Price Update: Stock Declines Approximately 9% Following Slower Performance
Trent Ltd, a prominent company under the Tata Group, experienced a notable decline in its share price, dropping by 8.7% to Rs 5,652 on the National Stock Exchange. This downturn followed the company’s recent Annual General Meeting (AGM), where it announced a slowdown in revenue growth expectations. In response, Nuvama brokerage revised its rating for Trent from ‘buy’ to ‘hold’ and lowered its target price from Rs 6,627 to Rs 5,884, citing concerns over the company’s future growth trajectory.
AGM Highlights and Growth Projections
During the AGM, Trent projected a revenue growth of around 20% for the first quarter of FY26, a significant decrease from the 35% compound annual growth rate (CAGR) achieved from FY20 to FY25. This new forecast falls short of the company’s long-term target of a 25% CAGR. Nuvama expressed disappointment with the company’s near-term growth expectations, particularly in its core fashion business, which is now expected to deliver only 20% growth in Q1FY26. The management reaffirmed its ambition for sustained growth of over 25% in the coming years, but the current performance indicates a gap from this goal.
In light of these developments, Nuvama adjusted its revenue forecasts for FY26 and FY27 downward by 5% and 6%, respectively. Additionally, estimates for earnings before interest, taxes, depreciation, and amortization (EBITDA) were reduced by 9% and 12%. The brokerage’s decision to adopt a more cautious investment stance stems from observed growth moderation, prompting a reassessment of Trent’s earnings outlook and overall valuation.
Future Growth Strategies
Despite the downgrade, Nuvama acknowledged Trent’s ambitious goals and successful implementation strategies. The company aims for a tenfold increase in revenue over the next few years, a target first introduced in FY23. During the AGM, management reported that revenue had already doubled since this goal was set. To support this growth, Trent plans to open approximately 250 new stores across various formats in FY26, with the possibility of increasing this number based on market conditions and real estate availability.
Nuvama highlighted Zudio Beauty and Star Bazaar as crucial components of Trent’s future revenue growth. However, both ventures require operational stability before pursuing significant expansion initiatives. The brokerage remains optimistic about Trent’s management, noting their historically conservative tone and execution track record.
Star Bazaar and Retail Expansion
Trent’s Star Bazaar hypermarket chain is positioned for significant growth, potentially surpassing the performance of Westside and Zudio due to the vast size of India’s food retail sector. The company has confirmed that Star Bazaar will focus on its branded products and will not integrate with Big Basket, which is perceived as a higher-priced alternative.
Management reiterated its target of achieving tenfold revenue growth, emphasizing that revenue has already doubled since the announcement. The organization is committed to expanding its retail footprint, with plans to establish over 250 new stores in FY26. This expansion strategy reflects Trent’s confidence in its growth potential, despite recent market challenges.
As of June 30, 2025, Trent’s retail presence included 248 Westside stores, 766 Zudio stores (including two locations in the UAE), and 29 stores representing various other lifestyle concepts. While Trent’s share price surged by approximately 70% in 2025, Nuvama has raised concerns about the sustainability of these high valuations, citing signs of declining momentum.
Market Response and Financial Performance
Following the AGM, Trent’s share price decline reflects investor apprehension regarding its growth outlook. Nuvama’s downgrade to a ‘hold’ rating stems from concerns over the company’s near-term growth potential, which they believe is currently too demanding given the recent performance indicators. The brokerage emphasized that a significant improvement in growth or other factors, such as the performance of Star Bazaar and Zudio Beauty, are critical risks to their outlook.
On a positive note, Trent reported its Q1 business performance, revealing that standalone revenue from product sales (including GST) reached Rs 5,061 crore for the April–June quarter of FY26. This figure represents a 20% increase from Rs 4,228 crore in the same period last year, aligning with the company’s guidance. As Trent navigates these challenges, its strategic focus on expansion and operational stability will be crucial for sustaining investor confidence and achieving its long-term growth objectives.
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