Why Tata's Retail Darling Trent Crashed 19%? Explained

Trent Shares Crash: Once the multi-bagger darling of D-street, now facing heightened investor skepticism. Tata Group's retail entity, Trent, failed to impress D-street investors as the company announced lower-than-expected revenue number. The shares of the company crashed by nearly 20% on Monday, marking one of the worst declines in the last 5 years.

Trent witnessed a modest 28% growth in the standalone revenue figure to Rs 4,334 crore in Q4, as compared to Rs 3,381 crore recorded in the corresponding quarter of the previous fiscal. While the double-digit figure might look impressive, the current growth figure is significantly lower than its 5-year Compound Annual Growth Rate (CAGR) of 36%.

During the quarter under review, the company continued its expansion across both Westside and Zudio formats. The company opened 13 new Westside stores and consolidated three, bringing the total store count to 248. As for Zudio, Trent added 132 new stores and consolidated two, taking the total store count to 765.

"In our view, after delivering strong double-digit like-for-like growth ... the high base effect is beginning to moderate Trent's growth momentum," Abhijeet Kundu, equity analyst at Antique Stockbroking reportedly said, as per a report by Reuters.

Its not just Trent

Besides Tata's retail arm, other group entities also experienced a sharp decline on Monday. Shares of Tata Motors and Tata Steels also witnessed a similar downtrend and declined by around 10% during the morning trading session. For its auto segment, the investor sentiment turned dim after its UK-arm Jaguar Land Rover announced a halt on exports to the US after Trump's tariff move. As for the metal sector, pain continues to persist as China announced retaliatory measures against US tariffs.

Nifty metal was one of the worst-performing sectoral indices on Monday, plummeting by around 7% or more than 500 points.

IT giant, Tata Consultancy Services (TCS) slipped to a 52-week-low price level. The shares of the company concluded the day at Rs 3,285 price level on the National Stock Exchange. Meanwhile, Trent concluded the trading session at Rs 4,745 price level, down by 14.7% on NSE.