Tata Group’s retail arm Trent faces a mixed response from analysts despite steady profit growth; experts say the correction could be a buying opportunity for long-term investor
Trent Shares Slip 7% as Q2 Numbers Disappoint Street
Trent Ltd — the Tata Group’s retail powerhouse behind Westside, Zudio, and Star — saw its shares tumble nearly 7% in early Monday trading after announcing its second-quarter FY26 results.
Even though the company reported an 11% year-on-year rise in consolidated net profit, investors weren’t too thrilled. The drag? Tepid performance from its Star Bazaar and Zudio businesses, along with concerns over cooling consumer sentiment in the value fashion and grocery retail segments.
At around 10 AM, Trent stock was trading at roughly ₹4,220 apiece, slipping from its recent highs.
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Why Investors Are Worried
While Trent has been one of the strongest performers in the retail space over the last couple of years, its Q2 performance hinted at a slowdown.
Revenue growth was decent, but analysts noted that newer store formats and Tier-2 city expansions are taking longer to turn profitable. Meanwhile, Star Bazaar’s revenue slipped about 2% YoY as the chain continued to revamp its stores.
Another red flag — margins dipped slightly due to higher contribution from its budget-friendly Zudio line, even as online sales surged 56%.
Motilal Oswal: “Buy the Dip”
Motilal Oswal remains upbeat on Trent, keeping its ‘Buy’ rating intact with a target price of ₹6,000, implying a 30% potential upside from current levels.
The brokerage expects Trent’s revenue, EBITDA, and PAT to grow at a healthy clip — 17%, 20%, and 14% CAGR, respectively, over FY25–28.
“We like Trent for its robust footprint additions and long runway for growth, especially in Star, which currently operates in just 10 cities,” the report noted.
It also added that the stock’s recent correction has made valuations more attractive, now trading around 70x Dec’27E EPS, excluding contributions from its Star and Zara joint ventures.
Motilal Oswal, however, cautioned that near-term gains hinge on how fast the company can boost profitability and same-store growth.
Nuvama: “Time to Stay Cautious”
Not everyone’s convinced. Nuvama Institutional Equities maintained a ‘Hold’ rating on Trent, cutting its target price from ₹5,850 to ₹5,189.
According to Nuvama, growth momentum has slowed down due to deeper penetration in smaller towns and newer store concepts with higher gestation periods.
The firm trimmed its revenue and earnings estimates for FY26 and FY27, citing slower productivity and margin pressure from Zudio and Star.
“While cost optimization helped support profitability, the moderation in growth warrants caution,” Nuvama said.
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Expert Take: A Pause, Not a Problem
Market watchers say Trent’s fall may just be a short-term reaction. The company still holds one of the strongest brand portfolios in Indian retail, backed by Tata’s financial discipline and expansion strategy.
With over 1,000+ stores and rising online traction, Trent continues to be a long-term growth story. Investors, though, might want to wait for signs of margin recovery before diving in again.
Final Word:
Trent’s latest dip shows how even the strongest retail stories can face short-term turbulence. While brokerages remain divided, the underlying fundamentals — brand power, store expansion, and consumer connect — still paint a long-term growth picture.
