Trent Stock Falls 50% from October Highs as Growth Momentum Slows, Analyst Confidence Erodes

Trent Limited , a prominent player in India's retail sector, has experienced a significant downturn in its stock performance, with shares closing at ₹4,283.70, down 7.4% and marking their lowest level since April. The stock has declined nearly 50% from October highs and is down 40% year-to-date.

Revenue Growth Disappoints

Trent reported a 17.1% year-on-year revenue growth to ₹4,036 crore for the September quarter, which is the slowest growth since March 2021. This deceleration in growth is attributed to several factors:

High base effect
Softening discretionary spending
Like-for-like growth in fashion portfolio limited to low single digits amid rising competition

Segment Performance

The company's performance varied across different segments:

Segment	Performance
Beauty, Personal Care, Innerwear, and Footwear	Contributed 21% of revenues
Westside Online Sales	Grew 56%, accounting for over 6% of Westside revenues

Financial Results

For the September quarter:

Net profit rose 6.5% to ₹451 crore
Revenue increased 17.1% to ₹4,036 crore

Analyst Outlook

Analyst sentiment has deteriorated significantly:

Time Frame	Analyst Recommendations
July 2019	All 11 analysts rated it 'Buy'
Current	16 of 27 analysts recommend 'Buy', 6 issue 'Sell' ratings

Citi has downgraded the stock from Buy to Sell, citing concerns about growth acceleration needed to sustain valuation multiples.

Stock Performance

Trent's stock has faced significant pressure in recent times:

Time Frame	Stock Performance
From October highs	Declined nearly 50%
Year-to-date	Down 40%

Investors and market watchers will be keenly observing Trent's strategies to navigate the challenging retail landscape and return to its targeted growth trajectory in the coming quarters.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.69%	+1.44%	-8.61%	-19.46%	-32.07%	+477.68%

Trent Limited , a prominent retail chain operator, has reported impressive financial results for the second quarter, showing robust year-over-year growth.

Financial Highlights

Trent Ltd posted a consolidated net profit of Rs 377.00 crore for Q2, representing an 11% year-on-year growth. Revenue increased 16% YoY to Rs 4,818.00 crore, though it declined sequentially from Rs 4,883.00 crore in the June quarter. Total income, including other sources, reached Rs 4,845.00 crore, up 15% YoY.

Profit and Revenue Performance

The company's total expenses rose to Rs 4,367.00 crore from Rs 3,915.00 crore in the same quarter last year. Operating profit before exceptional items increased to Rs 478.00 crore compared to Rs 461.00 crore in the prior year period, but dropped from Rs 555.00 crore in Q1 due to seasonal factors.

Half-Year Performance

For the first half of the fiscal year, Trent's consolidated revenue surged 18% YoY to Rs 9,701.00 crore, while net profit rose 21% to Rs 798.00 crore from Rs 662.00 crore in the same period last year.

Business Performance

The company reported consistent growth across retail formats, driven by momentum in affordable fashion and lifestyle segments.

Corporate Development

Trent's board has approved a proposal to tender its entire stake of 94,900 equity shares in the joint venture Inditex Trent Retail India as part of a proposed share buyback plan.

Conclusion

Trent's Q2 results demonstrate strong financial health and operational efficiency. The company's ability to maintain robust revenue growth while improving profitability underscores its resilience in the competitive retail sector. These results suggest that Trent continues to strengthen its position in the retail market, effectively navigating challenges while capitalizing on growth opportunities.