Trent Shares Dive 8% as Q3 Revenue Falls Short of Expectations

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AuthorAarav Shah|Published at:
Trent Shares Dive 8% as Q3 Revenue Falls Short of Expectations
Overview

Trent shares plummeted 8% following its Q3 FY26 business update, reporting revenue of Rs 5,220 crore, up 17% year-on-year but missing analyst forecasts. Despite aggressive store expansion, revenue per store declined, sparking investor concern. Analysts from HDFC Securities and Motilal Oswal remain bullish, upgrading and maintaining 'Buy' ratings respectively, citing the company's strong franchise and valuation adjustments.

Trent Stock Drops Amid Revenue Miss

Trent shares tumbled 8 percent in early trading on Tuesday, January 6, after the Tata Group retailer announced its provisional third-quarter financial results. The stock fell to Rs 4,060 apiece, halting a four-session winning streak and becoming a top loser on major Indian indices.

Q3 Performance Highlights

The company reported standalone revenue from the sale of products at Rs 5,220 crore for the October-December quarter of FY26. This represents a 17 percent year-on-year increase from Rs 4,466 crore in the same period last year. Revenue for the nine months ended December 31 climbed 18 percent year-on-year to Rs 14,604 crore. Trent's expanding store footprint includes 278 Westside stores, 854 Zudio stores (four in the UAE), and 32 other lifestyle concept stores. The quarter saw the opening of 17 new Westside outlets and 48 new Zudio locations.

Analyst Reactions and Outlook

Motilal Oswal Financial Services noted that Trent's 17 percent revenue growth was below its 20 percent estimate, though it signals steady growth after previous decelerations. The brokerage highlighted that the revenue increase was driven by a 28 percent rise in store count, while revenue per store saw an approximately 11 percent year-on-year decline. This metric indicates potential cannibalization in store-level sales.

Despite the weaker-than-expected revenue number, Motilal Oswal maintained a 'Buy' rating on Trent, anticipating near-term earnings downgrades could impact the stock's recent recovery. HDFC Securities upgraded Trent to 'Add' with a target price of Rs 4,700 per share, suggesting an upside potential of over 6 percent. The upgrade is underpinned by healthy inputs for future operational key performance indicators and a valuation adjustment.

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