Trent shares crash 13% in biggest single-day loss in a year on weak Q1 updates: Should you buy, sell or hold?

Shares of Tata Group retailer Trent Ltd fell 13 percent on Tuesday, marking their biggest one-day decline in a year, after the company's first-quarter business update missed analysts' expectations, triggering concerns over slowing growth despite continued store expansion.

The stock was the top loser on the Nifty 50 index during the day. The decline wiped out about Rs 13,356 crore from the company's market capitalisation.

The stock settled near the day's low at Rs 2,921 per share on the NSE, down 12.64 percent.

The sharp fall came after Trent reported standalone revenue of Rs 5,666 crore for the June quarter, up 19 percent year-on-year, but below market expectations of 22-23 percent.

The company's Q1 business update prompted cautious commentary from brokerages, although it continued to expand its retail network.

Nishchal Jain, Quant Researcher at Share.Market by PhonePe, said the revenue growth, while resilient, fell short of market expectations, leading brokerages to revise their near-term outlook.

He said Trent expanded its fashion footprint to 1,312 stores, with Zudio increasing to 982 outlets and Westside to 301. However, the rapid pace of expansion led to localised cannibalisation and a 12.2 percent decline in revenue per square foot.

On the sharp correction in the stock, Jain said the decline reflected institutional profit booking after the revenue miss and the stock's break below a key technical support level.

He, however, said the correction appeared to be a valuation consolidation rather than a change in the company's long-term fundamentals, supported by the expansion of the Zudio business.

Jain recommended that existing investors consider a "hold" or "accumulate on dips" strategy, while fresh investors may adopt a staggered buying approach to manage near-term volatility.

Trent has been expanding its retail network aggressively. The company added 250 stores during FY26, including Westside and Zudio outlets, and opened another 20 stores in the quarter ended June 2026.

The expansion comes at a time when retailers are facing uneven urban demand and rising competition, even as discretionary consumption remains resilient in some segments.

Aishvarya Dadheech, an analyst at Fident Asset Management, told Reuters Trent had earlier guided that it could grow revenue by two to two-and-a-half times over the next few years, driven largely by Zudio.

"Growth in Zudio has started normalising, which has raised concerns over the company's growth momentum," Dadheech said.

According to analyst estimates, same-store sales growth slowed to the low single digits, reflecting investor concerns over the company's ability to sustain high growth.

"For a 20 percent growth in two years, the stock valuations were as high as 70 to 80 times. The growth and valuation are not in sync," Dadheech said.

Brokerages also flagged weaker operating metrics. Goldman Sachs said the June quarter revenue was below market expectations, while Citi had estimated revenue growth of 23 percent.

Citi said revenue per square foot declined despite a relatively weak base and maintained a cautious view, citing weak store productivity, increasing competition and the impact of rapid store expansion.

(With inputs from Reuters)

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