Trent’s Rs 1.80 lakh crore rout from peak: Has Q2 just flipped the script for Tata group’s retail crown jewel?

Trent, Tata Group’s retail crown jewel, was one of the standout wealth creators of the bull run that lasted until September 2024. Investors who stayed with the stock through that phase were handsomely rewarded, with Trent delivering gains of 126% in 2023 and another 133% in 2024.

Then the story changed. After years of relentless gains, Trent’s momentum came to a grinding halt in 2025 and through much of 2026. The stock has since corrected more than 50% from its record high of Rs 5,563, wiping out around Rs 1.80 lakh crore in investor wealth.

The sell-off reflected a combination of concerns. Store network over-densification weighed on sales growth, competition intensified, consumption slowed and the stock’s lofty valuation left little room for disappointment.


But Trent’s latest quarterly update has given investors something they had been waiting for: a growth number that came in ahead of expectations.

Has the Q2 update just flipped the script?

Trent reported a 23% year-on-year rise in standalone revenue from operations to Rs 5,788 crore for the quarter ended September 30, 2026, compared with Rs 4,724 crore a year earlier, according to its exchange filing.

The momentum was not limited to the quarter. Revenue for the first half of FY27 rose 21% year-on-year to Rs 11,454 crore from Rs 9,505 crore in the corresponding period a year earlier. Revenue from merchandise sales, excluding other operating income, also grew 23% year-on-year in Q2FY27 and 21% during H1FY27.

What makes the performance more interesting is the backdrop. Wall Street major Bernstein pointed out that the growth surprise came in a quarter when other value-apparel retailers not covered by the brokerage struggled, partly because the festive season shifted from Q2 in FY26 to Q3 in FY27.

VMart reported 18% revenue growth and 2% same-store sales growth (SSSG) for the VMart brand. Adjusting for the festive shift, growth was 10% for VMart and 12% for Unlimited. V2 Retail reported 28% revenue growth, although SSSG was down 14.9%. After adjusting for the festive shift, SSSG stood at 0.5% in Q2FY27. Style Baazar reported 6% growth, with reported SSSG down 25%.

Against that backdrop, Trent’s 23% revenue growth stands out. The company also crossed a major store milestone during the quarter, opening its 1,000th Zudio store. As of September 30, 2026, Trent had 1,342 stores across Westside, Zudio and other lifestyle brands. During Q2FY27, the company added 10 Westside stores and 17 Zudio stores on a net basis. In H1FY27, net additions stood at 11 Westside stores and 36 Zudio stores.

Bernstein believes the 300-400 basis point growth surprise in the quarter was driven by a combination of factors. These included support from a low base, which is expected to continue in Q3FY27, Trent’s lower dependence on festive demand seasonality in general and in East and North India in particular, a better demand environment reflected in Retailers Association of India surveys showing stronger growth in West and South India recently, consistent execution, a strong end-of-season sale in August 2026 and the company avoiding price increases.

Buy, sell or hold Trent shares?

BofA analysts remain constructive on the company. They see Trent as a high-growth retailer operating in India’s large and still-unorganised fashion market. With the company holding only around 2% of India’s fashion retail market, the brokerage believes there remains room for further share gains and category formalisation.

Trent has built a differentiated retail platform spanning apparel, fashion, beauty, food and grocery, and emerging consumer lifestyle concepts.

BofA identified Zudio and Westside as the key fashion businesses, while Star is Trent’s private-label-focused general retailing format. Other formats, including Samoh and Burnt Toast, are relatively new, according to the report. The brokerage also highlighted Trent’s direct-to-consumer model and its end-to-end control over brands, products, sourcing, pricing, inventory and stores, backed by an integrated technology and supply-chain backbone.

“While consumer-facing propositions remain differentiated across formats, shared backend capabilities can provide substantial operating leverage,” the analysts said. BofA Securities has a Buy rating on Trent with a target price of Rs 3,075.

Morgan Stanley, which has a Buy call and a target price of Rs 3,406, said the better-than-expected revenue growth should be viewed positively, particularly in the context of the shift in the festive calendar. The stock has underperformed, falling 9% and 12% over the past one and three months, respectively, compared with declines of 5% and 7% for the BSE Sensex. Morgan Stanley expects some reversal in the near term.

For the brokerage, margins will be the key factor to monitor when Trent reports its results. It has a standalone EBITDA margin of 18.7%, compared with 19.6% in Q1FY27 and 17.2% in Q2FY26. With the stronger top-line growth, margins should be in line with its estimate or higher, Morgan Stanley said.

Citi’s contra call

Not everyone is convinced that Trent’s recent performance marks a broader turnaround. Citi has a Sell call on Trent with a target price of Rs 2,950 apiece. The brokerage noted that the company’s 23% revenue growth beat its estimate of 18%, despite lower-than-expected store expansion and an unfavourable shift in the festive calendar from Q2 to Q3.

One of the key metrics Citi is watching is revenue productivity. Average revenue per square foot, assuming the same new-store size as TTM, declined 8% year-on-year. While that was weaker than the previous period, it was better than Citi’s expectation of a 12% decline.

Trent added 56 net stores in the first half of FY27. Citi said a sustained improvement in the revenue-per-square-foot trend, combined with store expansion, could drive further re-rating.

Buying opportunity or false dawn?

That leaves investors with two very different interpretations of Trent’s latest numbers. The bullish case is that the recent weakness could well be over, with Trent’s Q2 performance showing that the underlying growth engine remains intact. The better-than-expected revenue growth, despite the festive-calendar shift, provides some support to that argument.

The bearish case is that the pressure on store productivity is more structural. If competition continues to intensify, cannibalisation weighs on performance and input costs put pressure on margins, the latest revenue surprise may not be enough to change the broader trajectory. For now, the debate around Trent is no longer simply about whether growth has slowed. The bigger question is whether the Q2 numbers mark the beginning of a recovery in growth and productivity.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.