Trent in oversold zone after 36% fall from peak: What trade to make ahead of Q1?

Shares of lifestyle retailer Trent are likely to remain in focus ahead of its Q1 earnings announcement later today. The stock, down 36% from its 52-week high of Rs 8,345, has underperformed over the past year and is currently hovering in oversold territory.

While technical charts hint at a potential pullback, brokerages expect a mixed set of numbers for the quarter. Technical analysts weigh in on how to trade the stock.

Trent shares have slipped into a negative zone in terms of returns over a one-year period. However, over the past week, its performance is showing green shoots, backed by a 6% rally, indicating a potential recovery.


Anuj Gupta, Director at Ya Wealth Global Research, expects fresh buying in the stock following the current momentum. While the stock is still not out of the woods, he highlighted the formation of a lower top–lower bottom structure — a sign of weakness. But he sees buying activity or accumulation at current levels.

One can buy Trent around Rs 5,000–5,100 with a stop loss of Rs 4,500 for a target of Rs 5,800–6,000, indicating a 13% upside. Gupta places the support at Rs 4,500.

Nilesh Jain, Vice President, Equity Research – Technical and Derivatives at Centrum Broking, is expecting a pullback towards Rs 5,400–5,600. Jain noted that Trent is in oversold territory and may see a reversal.

Trent shares are currently trading below their 50-day and 200-day simple moving averages (SMAs) of Rs 5,584 and Rs 5,879, respectively.

The stock has underperformed both Nifty and Sensex over a 1-year period.

What to expect in Q1

The Tata Group company is expected to post strong revenue growth for Q1FY26, led by aggressive store expansion, particularly in the Zudio format. However, brokerages anticipate pressure on profitability due to rising operating costs and a higher share of lower-margin Zudio sales.

While the topline may rise up to 36% YoY, EBITDA margin is likely to contract due to soft same-store sales growth (SSSG), cost inflation, and competitive pressures.

As a result, the company’s net profit is likely to take a hit, say brokerages, who are evenly divided on this metric. Out of the four estimates considered, two indicate a decline in profit after tax (PAT), while the others see low single-digit growth.

Read more: Trent Q1 earnings preview: Robust topline growth up to 36% YoY seen on store additions. Brokerages divided on PAT growth

Brokerage view ahead of Q1

-- PhillipCapital has a negative view on Trent

-- Motilal Oswal Financial Services (MOFSL) | Buy for target of Rs 6,600

-- Kotak Institutional Equities | Reduce for target of Rs 5,300

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)