Trent Shares Drop 8% As Q3 Update Draws Mixed Views

Shares of Tata Group’s retail arm Trent fell as much as 8% on Tuesday after its provisional third-quarter update drew mixed reactions from analysts. The company reported a 17% year-on-year rise in standalone revenue from the sale of products to ₹5,220 crore during the quarter.

The October–December quarter update for FY26 was released after market hours on January 5.

On Tuesday, it attracted mixed views from brokerages including Motilal Oswal, HDFC Securities, Citi and Morgan Stanley.

In early trade, Trent was the biggest loser among Nifty 50 stocks, plunging nearly 8% to ₹4,060 per share. However, it pared some losses later in the session to trade at ₹4,089 per share, down about 7.7% on the NSE at 12.22 PM.

Trent’s Q3 update

The company reported standalone revenue from the sale of products (excluding GST) of ₹5,220 crore in Q3FY26, marking a 17% year-on-year increase from ₹4,466 crore in Q3FY25. Revenue for the nine months ended FY26 rose 18% to ₹14,604 crore from ₹12,368 crore a year earlier.

As of December 31, 2025, Trent’s store portfolio comprised 278 Westside stores, 854 Zudio stores (including four in the UAE), and 32 stores across other lifestyle concepts.

During Q3FY26, the company added a net 17 Westside and 48 Zudio stores, taking total net additions for the nine-month period to 30 Westside and 89 Zudio stores.

What brokerages said

HDFC Securities, which until June last year had flagged “signs of fatigue in Westside and Zudio’s peak efficiency”, said that after a nearly 50% fall in the stock from its peak, the risk-reward profile now looks more attractive, prompting a reassessment.

The brokerage upgraded Trent to an ‘Add’ rating with a sum-of-the-parts target price of ₹4,700 per share. Several operational factors support this view. Around 54% of Zudio stores have been added in the past 18 months and are expected to start contributing to same-store sales growth from FY27.

Nearly 60% of new stores added between FY25 and October 2025 were in under-served markets in North and East India, which should aid growth.

At Westside, a more than 50% jump in memberships in FY25 could also support future sales. Store expansion remains strong, with scope to add 170–180 stores annually, as many districts still have limited Zudio presence and few alternatives.

Citi maintained a ‘Sell’ rating on Trent with a target price of ₹4,350. It noted that standalone revenue growth of 16.9% year on year was slightly ahead of its estimate of 15.3%, following growth of 19.8% in Q1 and 17.1% in Q2. The brokerage said higher-than-expected store additions supported revenue growth.

Year to date, Westside and Zudio have added 30 and 89 stores, respectively. However, average revenue per square foot declined 15.7% year on year, broadly in line with estimates, reflecting the impact of an early festive season and base effects.

Morgan Stanley maintained its ‘Overweight’ rating on the stock with a target price of ₹5,456, saying Q3 standalone revenue growth was largely in line with expectations, although sequential growth was lower than in Q3FY25, Q4FY25 and Q1FY26.

UBS also reiterated its ‘Buy’ rating on Trent with a target price of ₹6,200, but flagged that the company continues to face a weaker growth trajectory. It said Q3 revenue growth of 17% marked another soft quarter and fell short of expectations.

Meanwhile, domestic brokerage Antique Stock Broking flagged moderating growth due to a high base and unfavourable demand conditions. It cut its target price to ₹5,700 from ₹6,650, while maintaining a ‘Buy’ rating on expectations that the company can navigate intense competition over the medium to long term.

Motilal Oswal Financial Services said Trent’s reported revenue growth was lower than its 20% estimate, but noted that growth stabilised at 17% year on year after several quarters of deceleration.