Trent shares slide nearly 40% in a year; here are three reasons why the stock is underperforming

Shares of Tata Group’s retail arm, Trent, have lost significant ground over the past 12 months, sharply underperforming the benchmark NIFTY50 index amid signs of a slowdown in sales growth and a correction from rich valuations it had commanded a year ago.

The stock has dropped 38% from its previous year's high of ₹7,449.50 touched on October 7, 2024, and is currently down 45% from its all-time high of ₹8,345 recorded on October 14, 2024.

Slowing revenue growth

Trent, which operates the Westside and the value fashion brand Zudio, was among the top-performing retail stocks in 2023 and early 2024. Its meteoric rise was driven by rapid expansion of Zudio stores and aggressive pricing strategies, with a wide range of products priced below ₹1,000, disrupting the affordable fashion segment. However, over the past year, the company’s stock has entered a corrective phase as investors recalibrated expectations.

On Wednesday, October 8, Trent’s shares declined as much as 0.65% to ₹4,656 apiece on the NSE, extending recent losses.

The company released its operational update for the September quarter (Q2 FY26) and first half of FY26 on Monday, reporting 17% year-on-year growth in standalone revenue to ₹5,002 crore for the quarter. For the first half, revenue rose 19% year-on-year. As of September 30, 2025, Trent’s store portfolio included 261 Westside, 806 Zudio outlets (including three in the UAE), and 34 stores across other lifestyle concepts.

Despite these numbers, brokerages have flagged signs of moderation in the company’s growth trajectory. Goldman Sachs said the slowdown partly reflects lower sales throughput from newer Zudio stores in Tier-2 and smaller cities. It has cut its FY26–28 EPS estimates by 5%, citing reduced sales growth expectations.

UBS highlighted that Q2 revenue growth of 17% continues a deceleration trend seen since Q4 FY25. While UBS characterised this as a cyclically weak phase for Trent, it noted that a growth rebound could act as a catalyst for the stock.

Tepid Q1 earnings

Trent’s financial performance in Q1 FY26 remained steady, though growth rates have moderated. The company reported a consolidated net profit of ₹430 crore, up 9% year-on-year, while revenue from operations rose 19% to ₹4,883 crore. Operating profit jumped 38% to ₹847 crore, with margins improving 240 basis points to 17.35%. At the end of Q1, Trent operated 248 Westside, 766 Zudio and 29 other concept stores.

However, like-for-like sales growth in the fashion portfolio remained in low single digits, indicating that the company’s expansion is increasingly being driven by new store additions rather than organic sales growth. Trent said its focus remains on driving revenue share in key markets and evolving its store portfolio mix, rather than relying solely on comparative store performance.

Expensive valuations

Analysts also point to Trent’s extremely rich valuations—trading at over 100 times forward earnings at its peak—combined with sector rotation away from high-PE consumption stocks toward cyclical sectors such as defence, PSUs, and capital goods since late 2024. Weaker discretionary demand, competitive intensity in value fashion, and moderating margins have further weighed on sentiment.

Despite the recent correction, the company remains a key player in India’s fashion retail sector. Emerging categories such as beauty, personal care, innerwear, and footwear now account for over 21% of Trent’s revenues, signalling its efforts to broaden its product mix.

“The business delivered steady performance during the quarter. We remain focused on evolving our differentiated consumer proposition that appeals to a wider audience across diverse markets. Notwithstanding continuing competitive intensity and interim trends, we believe an unwavering focus on being relevant to our customers and building resilience with our business model choices will, over time, enable us to deliver significant value,” said Noel Tata, Chairman, Trent, on Q1 earnings.

As of 1:15 pm, Trent shares traded 0.75% lower at ₹4,650, underperforming the NIFTY50 index, which is trading flat