Shares of fashion retailer Trent fell by 8% on Tuesday, January 6, following the release of its business update for the third quarter (October-December) of the ongoing fiscal year2025-26 (Q3FY26).
Trent share price cracked as much as 8.3% to the day’s low of 4060.65 on the BSE, its lowest level since April 2024. Last year, the Tata group stock emerged as the worst Nifty 50 performer — snapping its 11-year winning run — as it slumped 40% amid slowing sales momentum and valuation concerns.
The trend seems to be continuing as Street once again sold off Trent amid growth moderation concerns.
Trent Q3 Business Update
For Q3FY26, Trent, in an exchange filing last evening, said that its revenue (excluding GST) jumped 17% year-on-year (YoY) to 5,220 crore as against 4,466 crore in the same period a year ago. For the nine months of the current fiscal, the figure was higher by 18% YoY at Rs 14,604 crore.
This is significantly lower than the high double-digit growth of 40-50% that the company reported in the first three quarters of last fiscal.
The company continued to focus on aggressive store opening, with 17 Westside stores and 48 Zudio stores launched in Q3. These stores tend to have a longer gestation period vis-Ã -vis the existing store network.
The growth slowdown emerged post FY25 as the topline cooled amid densification and shows no signs of slowing down. For the last two quarters before Q3, the company has reported revenue growth in the range of 18-20%.
Why is Trent stock falling today?
Harshal Dasani, Business Head at INVAsset PMS, told Mint that the key driver behind the Trent share price fall today is a visible moderation in growth momentum flagged in recent business updates.
Over the last few years, Trent was priced as a high-consistency compounder, supported by aggressive store expansion and strong same-store sales, particularly in the value fashion segment. As demand indicators soften and incremental growth becomes less linear, the market is recalibrating forward earnings assumptions, he noted.
Vaqarjaved Khan, CFA, Sr. Fundamental Analyst, Angel One, last week, told mint that it’s not that Trent’s growth collapsed, but its quality deteriorated. “Topline momentum was supported by aggressive store additions, while like-for-like sales slipped to low single digits, indicating demand softness and early signs of cannibalization.”
What amplifies the downside, according to Dasani, is the valuation sensitivity. Despite the sharp fall seen last year, Trent continued to demand a high P/E multiple of over 91 times.
“At peak levels, the stock reflected near-flawless execution and sustained high growth. Any signal of demand normalization or margin pressure forces a disproportionate correction, especially in stocks with heavy institutional ownership and crowded positioning,” he said.
As of 9.55 am, Trent stock price was trading 6.7% lower at 4129.85. On a longer time frame, Trent is a multibagger stock, offering 510% returns in five years.
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.
