The brokerage wrote in its note that Trent’s stock was volatile last week over the news of aggressive store additions of Westside, which was subsequently disproved.
Westside’s updated store count now stands at 240, implying a net addition of eight stores on a year-to-date basis.Kotak said that it continues to see pressure on Trent’s revenue throughput on account of its own densely located newer stores of Westside and Zudio.
The brokerage assumes a flat revenue throughput for Zudio and has trimmed revenue throughput for Westside, resulting in a 1-5% earnings per share cut for FY26-27.
Last month, Goldman Sachs had said that the weakness seen in shares of Trent is an opportunity to add positions. The brokerage has a ‘Buy’ rating on Trent, with a price target of ₹8,300 per share.The stock remained volatile following reports of Reliance Retail relaunching Chinese fashion brand Shein in India and the potential impact it could have on the businesses of Trent’s Zudio and Aditya Birla Fashion as well.
Shein was banned in India in 2020 amidst a crackdown on Chinese apps and over a data security issue.
Goldman Sachs said that Zudio still has potential to gain market share with a low competitive risk and the scale up of any new competitor is likely to be gradual and not disruptive.
With today’s drop, Trent’s Relative Strength Index (RSI) also declined to 39.7. This means the stock is neither in the ‘Oversold’ or ‘Overbought’ zone. An RSI reading below 30 indicates that the stock is ‘Oversold’.
The Tata Group stock now has also corrected 41% from its all-time high level of ₹8,345, which it had hit on October 14 last year.
Out of the 22 analyst who have coverage on Trent, 15 of them have a ‘Buy’ rating, while three say ‘Hold’ and four others have a ‘Sell’ rating on the stock.
Shares of Trent are trading 1.48% lower on Monday at ₹4,926.
