Trent shares down almost 40% from file excessive. Why are analysts predicting extra ache?

Trent, Tata Group’s retail star that delivered a staggering 640% return in 5 years, is dropping steam. The inventory is down almost 40% from its file excessive of Rs 8,345, and Kotak Institutional Equities warns it might slip under Rs 5,000, sustaining its Scale back name.

The brokerage has slashed its FY2026–28 earnings estimates by 3–7%, citing slower same-store gross sales progress (SSSG) and muted income prospects. Kotak stated that whereas the current GST lower on attire within the Rs 1,000–2,500 worth vary is optimistic, it’s unlikely to materially elevate Trent’s near-term progress.

Westside, which contributes round 35% of Trent’s standalone revenues, will see some affect. Nevertheless, the corporate is predicted to move on the profit to shoppers. Zudio, with merchandise largely under Rs 1,000, stays unaffected by the tax change, it stated in a word on September 10.

The report flagged considerations about retailer densification. Trent has been increasing aggressively in current cities, a transfer that would cannibalise income at older shops and maintain SSSG underneath stress. The corporate has added solely 20 shops within the first half of FY2026, decrease than the 26 shops added in the identical interval final 12 months.

Trent’s income progress has additionally been slowing, with quarterly SSSG falling from double digits in early FY2025 to low single digits by 1QFY26. Correspondingly, year-on-year income progress has eased from over 50% in FY24 to twenty% within the newest quarter. Kotak now fashions income to develop at a barely slower tempo, trimming forecasts by about 2% for FY2026–28.

Additionally learn: Patanjali Meals shares crash 67%! However that is simply opticalThe firm’s margins, nonetheless, are anticipated to stay regular. The corporate has benefited from RFID implementation throughout its provide chain, which has led to vital worker value financial savings and improved effectivity. Kotak expects Trent to completely realise these advantages in FY2026, though the margin upside might taper off past that.Kotak considers valuations to be costly towards its revised progress outlook. With dangers from retailer cannibalisation and slowing income momentum, the brokerage believes the inventory might fall under Rs 5,000 within the close to time period and preserve its Scale back stance with a good worth of Rs 4,900. The brand new worth goal implies a draw back of 6% from the final shut of Rs 5,193.

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At about 2:30 pm, shares of the corporate have been buying and selling at Rs 5,153, decrease by nearly a per cent. Trent shares have slipped 27% on a year-to-date foundation.

(Disclaimer: Suggestions, options, views and opinions given by the consultants are their very own. These don’t signify the views of the Financial Occasions)