Key Takeaways:
Trent Ltd posted Q1 revenue of 56.66 billion rupees, up 19% but below estimates, sending shares down as much as 11% on Tuesday.
"The revenue growth was below our estimate of 23%, while revenue per square foot continued to decline," Citi analysts said in a note, maintaining a sell rating with a target price of 2,733 rupees. The brokerage cited rising competition and cannibalization from rapid store expansion as key concerns.
The Tata Group retailer added 20 net stores during the quarter — one Westside and 19 Zudio outlets — bringing its total to 1,312 locations. Revenue per square foot fell 12.2% year-on-year, following declines of 11.6% in the fourth quarter and 16.1% in the third quarter, signaling that existing stores are generating lower sales. HSBC had expected revenue growth of about 21%, while Morgan Stanley's estimate stood at 21%.
The sell-off reflects investor disappointment with growth deceleration at one of India's most closely watched retailers. While most brokerages maintained positive long-term ratings — Macquarie set a target of 3,600 rupees and Bernstein 3,500 rupees — the near-term outlook remains clouded by moderating same-store sales and softer urban consumer demand. UPI transaction data for April and May pointed to weaker value growth in the fashion segment, Bernstein noted. The stock now trades near the 3,000-rupee mark, its lowest since early 2025. Investors will watch for management commentary on store productivity and demand trends in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
