Synopsis:
Trent Ltd, the Tata Group’s retail arm, posted slower quarterly growth amid muted consumer sentiment. With analysts still seeing meaningful upside potential, is this the time to buy?
Shares of a leading Tata Group retailer came under pressure after the company reported muted Q2FY26 results, signalling a slowdown in growth momentum. The performance reflected weaker fashion demand and margin stability, though analysts remain optimistic on the company’s long-term retail positioning and brand portfolio strength.
Trent Ltd opened at Rs. 4,621.60 against the previous close of Rs. 4,624.85 and hit an intraday low of Rs. 4,298, down 7.06 percent. The company commands a market capitalisation of Rs. 1,53,670.12 crore.
Financial Snapshot – Q2FY26
Quarter-on-Quarter (QoQ): Trent Ltd’s revenue from operations slipped 1 percent to Rs. 4,818 crore in Q2FY26 from Rs. 4,883 crore in Q1FY26. Operating profit declined 4 percent to Rs. 816 crore from Rs. 848 crore, while the operating profit margin remained stable at 17 percent. Profit before tax dropped 16 percent to Rs. 477 crore from Rs. 565 crore. Net profit declined 12 percent to Rs. 373 crore from Rs. 425 crore in the previous quarter. Earnings per share fell sequentially to Rs. 10.60 from Rs. 12.09.
Year-on-Year (YoY): On a yearly basis, Trent reported a 16 percent rise in revenue to Rs. 4,818 crore from Rs. 4,157 crore in Q2FY25. Operating profit grew 26 percent to Rs. 816 crore from Rs. 646 crore, with margins improving from 16 percent to 17 percent. Profit before tax rose 2 percent to Rs. 477 crore from Rs. 467 crore. Net profit increased 11 percent to Rs. 373 crore from Rs. 335 crore, while EPS improved to Rs. 10.60 from Rs. 9.53.
Analysts’ View
Jefferies maintained a Hold rating but cut its target price to Rs. 5,000 from Rs. 6,000, implying a 16.3 percent upside from today’s low of Rs. 4,298. The brokerage noted that growth deceleration persists despite an improvement in store additions. Like-for-like growth in the fashion segment remained low, while non-apparel categories and online sales at Westside performed relatively better.
Macquarie maintained an Outperform rating with a target price of Rs. 7,000, suggesting a 62.9 percent upside from the day’s low. The brokerage said Q2 operating EBITDA was broadly in line with expectations, though muted sentiment and unseasonal rains dented sales. It believes employee cost savings will be sustainable and that a GST rate cut could revive demand in small-ticket discretionary segments.
Morgan Stanley reiterated an Overweight rating with a target price of Rs. 5,456, indicating a 26.9 percent upside from the intraday low. It noted that Q2 results reflected slower growth trends, with demand impacted by weak sentiment and unseasonal weather. However, it highlighted that gross margins at both Westside and Zudio remained stable.
Trent Limited, a Tata Group company, operates a diversified retail portfolio catering to fashion, grocery, and lifestyle segments. Its key formats include Westside, one of India’s leading fashion retail chains; Zudio, known for affordable and trendy apparel; and Star, which competes in the food, grocery, and daily essentials market. The company continues to expand its footprint across India through rapid store additions and growing online channels.
Written by Manan Gangwar
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