On Tuesday, the shares of Trent Ltd, which is the retail arm of the Tata Group, were heavily sold after the business update for the December quarter (Q3FY26) did not impress the investors. The stock plunged to an intraday low of ₹4,060, dropping 8.34% on the NSE, and on the BSE it dipped over 8.3%, with a high volume of trades.
Q3 Business Performance
In a filing made after the market closed on Monday, Trent disclosed that its individual revenue for the December quarter increased by 17% compared to the previous year, reaching ₹5,220 crore as opposed to ₹4,466 crore during the same timeframe last year.
The company maintained its aggressive expansion strategy during the quarter and added:
- 17 Westside stores
- 48 Zudio stores
As of the end of the quarter, Trent’s retail portfolio comprised:
- 278 Westside stores
- 854 Zudio stores (including 4 in the UAE)
- 32 stores across other lifestyle and fashion concepts
Why Did the Stock Fall?
Despite healthy revenue growth and rapid store additions, investors appeared concerned about slowing growth momentum and declining productivity, triggering profit booking.
Brokerage reactions to the update were mixed:
- Citi said Trent’s standalone revenue growth of 16.9% YoY exceeded its estimate of 15.3%, supported by faster-than-expected store additions. Nonetheless, it raised a red flag in terms of a 15.7% decline in average revenue per square foot compared to the previous year, which indicated that store productivity was under pressure.
- Morgan Stanley maintained a positive stance, noting sustained expansion momentum. It highlighted that Westside added 30 stores in the first nine months of FY26, nearly double the FY23–FY25 annual average, while Zudio’s 48 store additions in Q3 beat estimates. Still, it acknowledged that sequential revenue growth was weaker than recent quarters.
- UBS struck a cautious tone, stating there was “no respite from the weaker growth trajectory”, and noted that the 17% Q3 growth was below expectations, marking another soft quarter.
Heavy Trading Volumes
Trent shares witnessed significantly higher-than-usual activity:
- On the NSE, trading volume surged 4.3 times to 24.46 lakh shares, compared with an average of 5.75 lakh shares.
- On the BSE, 1.02 lakh shares were traded, versus a two-week daily average of about 66,000 shares.
Current Stock Status
As of 9:44 AM, Trent shares were trading 7.11% lower at ₹4,115, underperforming the broader Nifty 50, which was trading largely flat with a negative bias.
Outlook
While Trent continues to expand aggressively through its Westside and Zudio formats, analysts believe investors are now closely watching store-level productivity and growth sustainability, which will be key drivers for the stock’s performance in the coming quarters.
