Trent shares hit 10% upper circuit after Q2 revenue beats estimates despite festive shift; analysts weigh in

Trent shares rallied in the early trade on Tuesday, October 6, after the Tata Group retailer reported a strong business update for the September quarter (Q2 FY27).

The stock hit a 10% upper circuit limit of ₹2,838 on the NSE.

In its provisional business update shared on Monday, the company said its standalone revenue from operations, excluding GST, rose 23% year-on-year to ₹5,788 crore in Q2 FY27, compared with ₹4,724 crore a year ago. Revenue from merchandise sales, excluding other operating income, also grew 23% during the quarter.

The company’s H1FY27 revenue rose 21% YoY to ₹11,454 crore.

Zudio crosses 1,000 stores; Trent’s total store network reaches 1,342

The quarter also marked a key milestone for Trent’s fast-growing Zudio business, with the retailer opening its 1,000th Zudio store during Q2. Zudio added 17 stores on a net basis during the quarter, taking H1 additions to 36 stores.

Trent also opened 10 Westside stores in Q2, taking its total portfolio across Westside, Zudio and other lifestyle brands to 1,342 stores as of September 30.

The 23% revenue growth highlights continued momentum in Trent’s business.

The stock closed at ₹2,580 on Monday, October 5, and is down nearly 10% so far this year. Investors will assess whether the Q2 business update and continued expansion of Zudio provide a fresh trigger for the stock.

How the company fared in Q1 FY27

The Tata Group retail chain operator Trent reported a net profit of ₹532 crore in the first quarter of current financial (Q1FY27), marking an increase of 26% from ₹423 crore in the same period last year.

The operator of Zudio and Westside stores reported a strong operational performance as its earnings before interest, taxes, depreciation, and amortization (EBITDA) advanced 33% to ₹1,110 crore and its EBITDA margin improved by 210 basis points to 19.6%.

At the end of first quarter, Trent had 1,312 stores in 330 cities including three stores in United Arab Emirates (UAE) the total retail area was 18.04 million square feet.

The company added 19 Zudio stores and one Westside store at the end of Q1 compared with 104 Zudio stores and 22 Westside stores it opened in the previous quarter.

Total store count for Westside was 301 and Zudio was at 982 stores.

What analysts say

CITI

CITI said that Trent reported standalone revenue growth of 23% YoY, compared with 19%/20%/16%/17% growth in the previous four quarters, and ahead of its estimate of 18%. This was despite lower-than-expected store expansion, with 10/17/30 net Westside/Zudio/overall stores added versus CITI’s expectations of 12/30/44, respectively, and an unfavourable festive-calendar shift from Q2 to Q3.

Average revenue per square foot, assuming the same new-store size as TTM, declined 8.4% YoY, compared with a 12.4%/11.6%/16.1%/15.5% YoY decline in the previous four quarters and CITI’s expectation of a 12% decline. In H1FY27, Trent added 56 net stores, compared with 58 in H1FY26 and 243 in FY26.

CITI said sustained improvement in the revenue-per-square-foot trend, combined with store expansion, could drive further re-rating. However, it remains cautious on Trent given the still-weak revenue-per-square-foot trend, increasing competition, the impact of cannibalisation and the risk to margins from input-cost inflation.

HSBC

HSBC said DMart's standalone revenue growth was ahead of its estimate of 19% and consensus expectations of 18%.

Morgan Stanley

Morgan Stanley has described Q2 as a strong beat, with revenue growth accelerating to 23% from the 16–20% range seen over the past five quarters. It said margins remain a key metric to monitor.

Morgan Stanley added that the better-than-expected revenue growth, particularly in the context of the shift in the festive calendar from Q2 to Q3, should be viewed positively.