Archive · 10 Nov 2025
Trent Stock Drops to 52-Week Low Amid Brokerage Caution Post Q2 Earnings
Trent, a company owned by the Tata Group that runs clothing and department stores, saw its stock price drop a lot, reaching its lowest point in a year.
This happened even though their profits went up a bit compared to last year.
Some experts who analyze stocks are now worried about Trent's future growth.
They point out that people are not spending as much, and there are more stores competing for customers.
Trent is also opening many new stores, especially in smaller cities, which takes time to make money.
Because of these concerns, some experts have lowered their ratings and price targets for Trent's stock.
While the company is still opening new stores and growing its online sales, the overall sales growth has slowed down.
Trent's shares dropped nearly 7% to a new 52-week low following Q2 FY26 earnings.
The company reported an 11% year-on-year rise in Q2 net profit, but profit declined from the previous quarter.
Brokerages expressed caution, with Citi downgrading to 'Sell' and others trimming price targets due to moderating growth and competition.
Factors contributing to concerns include subdued consumer sentiment, intensified sector competition, and expansion into Tier-2 cities.
Despite EBITDA growth, profit after tax fell due to higher depreciation, and revenue growth slowed to a multi-quarter low of 17%.
- Who
- Trent (Tata Group's retail arm) and various brokerage firms (Citi, Goldman Sachs, Jefferies)
- What
- Trent's stock price fell to a 52-week low following its Q2 earnings report, leading to cautious ratings from several brokerages.
- When
- Monday, September 2025 (following Q2 earnings release)
- Where
- India
- Why
- Concerns over moderating growth due to subdued consumer sentiment, increased competition, aggressive expansion in smaller cities, and a decline in profit after tax despite EBITDA growth, compounded by factors like unseasonal rains.
Cautious to Sell (Citi, Goldman Sachs, Jefferies)
Potential for Future Growth (Implied by historical performance and existing positive ratings)
Growth Outlook and Competition
Cautious to Sell (Citi, Goldman Sachs, Jefferies)
Citi downgraded to 'Sell' with a target of ₹4,350, citing moderating growth due to weak consumption, rising competition, cannibalisation, and expansion into smaller cities. Goldman Sachs maintained 'Neutral' with a trimmed target of ₹4,920, noting operating EBIT growth below expectations and potential margin benefit absorption.
Potential for Future Growth (Implied by historical performance and existing positive ratings)
While current growth is facing headwinds, the company continues its store expansion, with Jefferies noting sequential pick-up in store additions. Historically, Trent has been a 'multibagger' stock, suggesting underlying long-term potential.
Financial Performance and Drivers
Cautious to Sell (Citi, Goldman Sachs, Jefferies)
Despite a 26.5% rise in EBITDA and 14% in operating EBITDA, profit after tax declined due to higher depreciation. Subdued consumer sentiment impacted sales momentum, and revenue growth decelerated to 17%, a multi-quarter low. Goldman Sachs cited unseasonal rains and consumers prioritizing big-ticket purchases post-GST rate reduction for weak LFL growth.
Potential for Future Growth (Implied by historical performance and existing positive ratings)
Automation initiatives are helping to mitigate margin pressures, and non-apparel categories and online sales through Westside are gaining traction. Online sales showed strong growth, now contributing significantly to Westside sales.
- Company
- Trent (Tata Group's retail arm)
- Stock Movement
- Slipped nearly 7% to a fresh 52-week low of ₹4,310
- Market Cap
- ₹1.53 lakh crore
- Q2 FY26 Net Profit
- Rose 11% year-on-year to Rs 373.42 crore (but declined 12% from Q1 FY26)
- EBITDA Growth
- Rose 26.5% year-on-year
- Operating EBITDA Growth
- Rose 14% year-on-year
- Revenue Growth
- 17% (multi-quarter low)
- New Stores Opened (Q2 FY26)
- 19 Westside, 44 Zudio
