Trent Shares Crash 40%; Can They Make a Comeback?

Synopsis: Trent Ltd has corrected over 40% from its peak due to slowing revenue growth, high valuations, weak same-store sales, and margin pressure. However, recent gains reflect renewed investor interest, supported by strong brokerage outlooks and expansion plans. Technical signals suggest a potential trend reversal, though risks around demand and valuation remain.

The shares of a Tata Group company specialising in apparel, footwear, accessories, and lifestyle products, primarily operate through a diverse portfolio of exclusive in-house brands, are in focus as they have crashed more than 40 percent from its all time high. In this article, let’s explore whether the worst is over or if more downside is yet to come.

With a market capitalization of Rs. 1,64,986.62 crores in the day’s trade, the shares of Trent Ltd rose upto 6.8 percent, making a high of Rs. 3,095.20 per share compared to its previous closing price of Rs. 2,897.00 per share.

Trent Share Crash Explained

The shares of this Tata Group company have witnessed a sharp correction, plunging over 40% from their all-time high of Rs. 5,563.35. The significant decline reflects weak market sentiment, profit booking, and other factors.

Key Reasons for the Fall

Slowing Revenue Growth

The company’s revenue has continued to grow from Rs. 8,242 crore in FY23 to Rs. 20,074 crore in FY26. However, the pace of growth has slowed significantly, with sales growth declining from 83.24% in FY23 to 17.16% in FY26. This trend indicates that while demand remains positive, the company is entering a more mature growth phase. The sharp decline in growth rates suggests challenges in sustaining previous expansion levels, making slowing revenue growth a key concern for future performance and valuation.

Valuation Was Extremely Expensive

At its peak, Trent traded at extremely expensive valuation levels compared to other Indian retail companies. The stock’s Price-to-Earnings (P/E) ratio reached around 231.6 times during 2024, while its Price-to-Book (P/B) ratio was approximately 62.5 times. Such elevated valuations reflected very high growth expectations from investors. These rich valuation multiples contribute significantly to the stock’s correction and decline in market sentiment.

Weak Same-Store Sales Growth and Muted Demand

Trent’s existing stores have witnessed slower sales growth as consumers have reduced spending on discretionary products such as apparel and fashion. A challenging demand environment has affected store productivity and revenue generation. Since same-store sales growth is a key indicator of retail performance, the slowdown has raised concerns about the company’s ability to sustain its historically strong growth trajectory.

Increased Competition and Store Cannibalisation

The Indian apparel retail market has become increasingly competitive, with both offline retailers and e-commerce platforms aggressively expanding. At the same time, Trent’s rapid expansion of the Zudio network has resulted in some stores competing for the same customer base. This cannibalisation has reduced revenue per store, limited sales growth, and created pressure on overall profitability.

Slower Benefits from Aggressive Expansion

Trent continues to expand its store network across new geographies and smaller cities to drive future growth. However, newly opened stores generally require time to build customer traffic and achieve optimal sales levels. As a result, the benefits of expansion are realised gradually, which has moderated short-term revenue growth and earnings performance.

Margin Pressure

Operating margins have come under pressure due to lower revenue per store, increased competition, and the costs associated with opening and scaling new stores. Investments in expansion, employee costs, and operational expenses have affected profitability. This has led investors to question whether the company can maintain strong earnings growth while continuing its aggressive expansion strategy.

Is the worst over or is more fall yet to come?

On June 17, Trent Ltd shares jumped more than 7%, leading the Nifty 50 gainers, as investors kept buying into the Tata Group retailer on strong volumes and positive long-term growth expectations. In the last three trading sessions, the Trent Shares have rallied more than 11 percent. 

Citi On Trent 

Citi said that despite a challenging operating environment, demand across categories remains healthy. It flagged raw material costs and labour availability as key supply-side concerns, but believes the overall impact of inflation is still manageable for the business.

The brokerage noted that Trent is focusing more on improving product assortment, sourcing strategies, and operational efficiencies rather than fully passing higher costs on to consumers. It also suggested that shifts in market share may end up being a bigger factor than inflation pressures.

Citi highlighted that the opportunity for Trent’s value-fashion chain Zudio is larger than previously estimated. It also pointed to the company’s plans to expand into categories like jewellery, accessories, beauty, fragrances, and home products, which could support longer-term growth.

Additionally, Citi viewed Star, Trent’s grocery business, as well-positioned with strong long-term potential, suggesting it could become an increasingly attractive part of the company’s overall portfolio.

HSBC on Trent

Brokerage firm HSBC maintained its “buy” rating on Trent and set a target price of Rs. 4,910 per share on a pre-bonus-adjusted basis. It remains positive on the company’s long-term growth outlook despite broader market uncertainties.

HSBC highlighted that Trent’s lifestyle retail brand Westside has resumed expansion, particularly through larger-format stores. It also noted that the company’s core retail business remains stable, with continued growth expected from ongoing store additions and strong performance in the value-fashion segment.

The brokerage further said that improved disclosures for Zudio have provided better visibility into its growth trajectory. It sees the value-fashion chain as a key driver of long-term expansion, supported by strong demand and scalable store-led growth opportunities.

Technical Overview on Trent Ltd

The stock shows a weekly chart where it was in a clear downtrend from its all-time high. Recently, it has broken the trendline and shifted into an uptrend phase, indicating a potential reversal in overall market structure.

It has also formed a head and shoulders pattern at the base and given a strong breakout above it. This breakout is a bullish signal, suggesting continued upward momentum and strength in the current trend.

Financials & Others

The company’s revenue rose by 19.23 percent from Rs. 4,217 crores in March 2025 to Rs. 5,028 crores in March 2026. Meanwhile, Net profit rose from Rs. 312 crores to Rs. 413 crores in the same period.

The company shows strong profitability metrics with a ROCE of 28.3% and ROE of 27.7%, indicating efficient use of capital and strong returns for shareholders. A debt-to-equity ratio of 0.37 also suggests the company is not heavily leveraged and maintains a relatively healthy balance sheet.

It has also demonstrated solid growth and consistency over time, with profit growing at a 68.7% CAGR over the last 5 years, sustained ROE of around 28.6% over 3 years, and a median sales growth of 27.2% over the last 10 years, reflecting strong historical expansion and operational performance.

Trent Ltd is an Indian retail company and part of the Tata Group. It operates in the fashion and lifestyle retail sector, offering products such as apparel, footwear, accessories, and home goods. Its major retail brands include Westside, Zudio, Utsa, and Samoh, which cater to different customer segments from budget to premium.

The company also runs grocery and grocery-plus formats like Star Bazaar and wholesale formats through Booker, expanding its presence beyond fashion into everyday essentials. Headquartered in Mumbai, Trent is known for its fast-growing retail footprint across India and is considered one of the key modern retail players in the country.

Trent Ltd operates with a strong retail footprint, comprising 1,286 stores (including presence in 3 cities in the UAE) across 321 cities. The company has a total retail area of about 17.70 million sq. ft., reflecting its large and expanding physical presence in India and select international markets.

Conclusion

The near-term picture for Trent Ltd looks more like a potential recovery phase rather than a continuation of a deep downtrend. The stock has already corrected from its all-time highs, and the recent breakout above a long-term trendline, along with a bullish head-and-shoulders reversal pattern, suggests that downside momentum may be weakening. The strong buying interest and 11% rally over the last few sessions also indicate improving sentiment and accumulation at lower levels.

However, it is still too early to conclude that all downside risk is gone. Broker views from Citi and HSBC highlight solid long-term growth drivers like Zudio expansion and diversification, but also point to ongoing cost pressures and a challenging operating environment. This means volatility can still continue in the short term. Overall, the worst of the downtrend likely appears to be behind for now, but further upside will depend on consistent earnings delivery and whether the breakout sustains rather than fails.

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