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Trent’s results were in-line with expectations and the company also maintained margins at 18%. The stock had declined earlier in the week as well over concerns regarding the relaunch of Chinese brand Shein in India by Reliance Retail.
Brokerage firm Bernstein maintained its “outperform” rating on Trent but cut its price target to ₹6,900 from ₹8,100 earlier. It called Thursday’s move in the stock price post results an “over-reaction”.
It said that store additions, revenue growth and margins are a key positive but same store sales growth is a disappointment.Citi, which had the highest target on the street for Trent at ₹9,350, also cut that to ₹7,800.
It called the moderation in the like-for-like growth in the fashion business as a combination of a further slowdown in discretionary consumption, along with a higher base.At the current price, Trent is trading at 42 times financial year 2027 estimated Enterprise Value-to-EBITDA compared to Titan and Avenue Supermarts, who trade at 36 times, according to Citi. The brokerage still called the operational performance for Trent as “strong.”
Jefferies has a “hold” rating on the stock with a price target of ₹5,800, calling the numbers just in-line for the second quarter in a row.
“Despite some investor concerns, adjusted EBITDA margins were largely maintained, which came as a relief,” Jefferies wrote in its note, adding that the reaction on Thursday may have possibly been due to the earnings upgrade cycle appearing to have paused along with valuations that are not cheap.
Out of the 22 analysts that have coverage on Trent, 13 of them have a “buy” rating on the stock, five of them say “hold”, while four of them have a “sell” rating on the stock.
Shares of Trent ended 8.4% lower on Thursday at ₹5,268 and has now corrected 37% from its 2024-peak of ₹8,345.
