Trent share price crashes 6% to 52-week low despite rise in Q2 profit. What's behind the fall in Tata group stock?

Shares of retailer Trent Limited cracked over 6% in intraday trade on Monday, November 10, to a fresh 52-week low even as the company posted a double-digit growth in the second quarter profit and revenue.

The fall comes as analysts highlighted that significant cost-control measures bolstered the current earnings, while the revenue growth acceleration remains a key trigger for Trent.

Trent share price tumbled as much as 6.80% to the yearly low of ₹4310 on the BSE.

Trent Q2 results

While Trent's revenue from operations witnessed a near 16% year-on-year (YoY) growth, analysts said revenue growth continued to decelerate in Q2 FY26, as ~43% YoY area addition growth was offset by a sharp ~17% YoY decline in revenue per square foot, indicating store-level sales cannibalisation.

Despite revenue growth deceleration, the company consolidated net profit to ₹373.42 crore, a growth of 11.44% aided by robust cost controls.

The growth momentum moderated owing to an expanding mix of tier-2 and new stores, which have a higher gestation period than the existing network, said analysts at Nuvama Research. "Profitability was pressured by slower productivity, but benefited from significant cost optimisation."

Against this backdrop, brokerages lowered the earnings outlook for Trent, which pressured the stock in trade today.

Trent shares: Buy or sell?

Nuvama Research tweaked its revenue, EBITDA, and PAT estimates for FY26 by -3.6%, -4.1% and -9.5% and for FY27 by -3%, -3.1% and -9.8%, respectively. "This, along with a valuation rollover to H1FY28E, yields a revised target price of ₹5,189, lower than ₹5,850 earlier. The brokerage, meanwhile, maintained its ‘HOLD’ rating on the Tata group stock.

Similarly, analysts at Motilal Oswal Financial Services (MOSL) said that it has raised its FY26-28 reported EBITDA estimates by ~4-5%, driven by cost-saving measures. However, it cut FY27-28E earnings by 4-5% due to higher depreciation.

MOSL said it continues to like Trent for its robust footprint additions, strong double-digit growth, long runway for growth in Star (presence in just 10 cities), and potential scale-up of emerging categories (Beauty, Innerwear, Footwear, and LGDs). However, revenue growth acceleration remains a key trigger.

The brokerage reiterated a 'BUY' rating on Trent with a revised target price of ₹6,000, premised on 44x Dec’27E EV/EBITDA for the standalone (Westside and Zudio) business, ~3x EV/sales for Star JV, and ~1.5x EV/EBITDA for Zara JV (sharp cut from ~6x EV/EBITDA due to tendering of shares by Trent at low valuations).

As of 10.25 am, Trent shares traded at ₹4317, down 6.66%.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.