What sparked Tata Trent’s Rs 18,000 crore rout?
The numbers behind the Q1 miss Live Events What brokerages are saying Should you buy the dip in Trent? as a Reliable and Trusted News
The numbers behind the Q1 miss Live Events What brokerages are saying Should you buy the dip in Trent? as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Shares of Tata Group’s fashion retailer Trent, which runs the Westside and Zudio chain of stores, crashed 10% to hit a day's low of Rs 3,010.10 on the BSE, wiping out nearly Rs 17,773 crore in market capitalisation, after the company’s Q1 revenue growth fell short of Street estimates.The stock's sharp slide comes after it rallied 23% in the past month and 50% since its March 2026 lows as investors bet on an acceleration in revenue growth from the 20% YoY pace seen in Q4 of FY26. Instead, the print showed growth decelerating, triggering the sell-off.Trent's 1Q standalone revenue came in at Rs 5,666 crore, up approximately 19% year-on-year, below expectations of roughly 22% YoY growth. Revenue from sale of products, net of GST, also grew around 19% YoY.The growth was driven primarily by a 26% YoY increase in store count, but revenue per store declined approximately 5% YoY, compared to a 4% YoY decline in the fourth quarter of FY26 — a trend that points to either a slower ramp-up of newer stores or a continuation of cannibalization effects at existing outlets.Store expansion also moderated during the quarter.
Trent added 26 stores in 1QFY27, taking its total fashion format store count to 1,312, up 26% YoY. Zudio, the value fashion chain, added 19 net stores to reach 982 outlets, up 28% YoY, while Westside added just one net store, taking its count to 301, up 21% YoY. Trent's other fashion formats rose by six stores quarter-on-quarter to 29, flat year-on-year.Citi, which has a Sell rating and a target price of Rs 2,733, one of the most bearish among the brokerages, flagged that reported standalone revenue growth of 19% YoY compared with its own estimate of 23%, and against 20%, 16% and 17% in the preceding three quarters. It noted that average revenue per square foot, assuming similar new-store sizing as the trailing twelve months, declined 12.2% YoY, compared to declines of 11.6% and 16.1% YoY in the fourth and third quarters respectively — a weak trend even as it benefited from a soft base.The brokerage said it would remain cautious given a still-weak revenue per sq ft trend, along with increasing competition, the impact of cannibalization, and new-store expansion in tier 2/3 towns. It did note that the first quarter is seasonally weak for store additions, with Westside and Zudio adding 1 and 19 stores respectively against its estimate of 0 and 6.Macquarie, which maintains an Outperform rating with a target of Rs 3,600, had flagged weaker-than-expected sales growth heading into the print, saying it believed same-store-sales growth momentum moderated from Q4 levels, and that this growth moderation is likely to weigh on near-term performance.
The BriefWire