Trent shares fall 9%: Keep Rs 3,700 as stop loss to go long in Zudio-parent's stock, says analyst

Trent share price

• Trent shares fell over 9 percent after Q3 FY26 results showed moderated growth
• Analysts advise caution as Trent stock remains in a downtrend with bearish bias
• Trent opened 65 stores in Q3; faces valuation and demand issues.

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The shares of Zudio and Westside-parent Trent tumbled more than 9 percent on January 6 after the company released provisional results for Q3 FY26. Analysts expect sustained weakness, advising what strategy investors should take.

The shares of the company dropped to Rs 4,017.2 apiece in the afternoon of Tuesday, snapping a four-session gaining streak and emerging as the top losers on Indian benchmark indices Sensex and Nifty.

Trent Q3 business update:

Trent released its business update for the October-December quarter of FY26 in the post market hours of January 5. The company reported standalone revenue from sale of products at Rs 5,220 crore during the quarter. This marks a 17 percent year-on-year (YoY) rise from the Rs 4,466 crore reported in the same period of the previous financial year.

Notably, the Zudio and Westside-parent’s revenue from operations had risen more than 17 percent YoY to Rs 4,724 crore during Q2 FY26, same as the revenue growth reported in Q3.

The company’s revenue from sale of products in the 9 months ended on December 31 (April-December) meanwhile rose 18 percent YoY to Rs 14,604 crore, up from Rs 12,368 crore in the year-ago period.

At the end of Q3 FY26, Trent had 278 Westside stores, 854 Zudio (including 4 in UAE) and 32 stores across other lifestyle concepts. During the quarter, the company opened 17 new Westside stores, and 48 new Zudio stores.

What led to Trent's share price crash?

Today’s sharp fall extends a broader trend that has already positioned Trent as the worst-performing stock within the Nifty 50 in 2025, underscoring that today’s fall is part of a deeper re-rating cycle rather than a one-day reaction, said Harshal Dasani, Business Head, INVasset PMS.

“The key driver is a visible moderation in growth momentum flagged in recent business updates. Over the last few years, Trent was priced as a high-consistency compounder, supported by aggressive store expansion and strong same-store sales, particularly in the value fashion segment. As demand indicators soften and incremental growth becomes less linear, the market is recalibrating forward earnings assumptions,” Dasani added.

What amplifies the downside is valuation sensitivity, the analyst said. At peak levels, the stock reflected near-flawless execution and sustained high growth. Any signal of demand normalization or margin pressure forces a disproportionate correction, especially in stocks with heavy institutional ownership and crowded positioning, he added.

“The current price action suggests that the market is transitioning from growth extrapolation to growth verification. Until there is clearer visibility on demand recovery and earnings trajectory, volatility is likely to remain elevated, with multiples adjusting to a more normalized growth outlook rather than past optimism,” Dasani concluded.

Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara, said that the initial drop in stock value with high market volume suggests that market players are factoring in a slowing down of momentum and being cautious on consumer demand. The stock, on one hand, continues to exhibit some inherent strength with further expansion of stores and high buy-side interest profile among analysts. In the short term, market performance would largely be driven by market re-rating of earnings predictions, he added.

Trent technical view:

Technically, the stock remains in a broader downtrend, trading well below its 50, 100, and 200-day EMAs, confirming sustained weakness, said Drumil Vithlani, Technical Research Analyst at Bonanza.

“The recent bounce was corrective in nature and got sold into, highlighting strong supply near the ₹4,400–4,500 zone. RSI has slipped back toward the 40 region, reflecting fading momentum and lack of bullish strength. Unless the stock reclaims ₹4,500 with volume, the bias stays bearish to rangebound, with downside risk toward ₹3,800–3,700. A wait-and-watch or sell-on-rise approach is advisable in the near term,” he said.

Motilal Oswal on Trent:

Motilal Oswal Financial Services noted that the revenue growth reported by Trent is lower than the 20 percent revenue growth estimated by the brokerage. It however noted that the revenue growth remained steady at 17 percent YoY after several quarters of revenue growth deceleration.

Revenue growth is primarily driven by an approximately 28 percent YoY increase in store count, with revenue per store declining around 11 percent YoY, indicating continued cannibalization in store-level sale, it added.

“Trent’s stock price had run up in the last few days (up ~9% since 19th Dec’25) on expectations of a pick-up in revenue growth. A weaker-than-expected number could weigh on the recent stock price recovery as earnings downgrades are likely to continue in the near term,” Motilal said, while keeping a ‘Buy’ call on the stock.

Antique Stock Broking on Trent:

Antique Stock Broking flagged moderating growth on high base and unfavourable demand. It cut its target price for the stock to Rs 5,700 apiece from Rs 6,650 apiece, while maintaining its 'Buy rating on optimism that the company can steer high competition on a medium-to-long term basis.

The latest target price implies an upside potential of more than 50 percent from the stock's previous closing price.

Morgan Stanley however remained 'Overweight' on the stock, saying that the growth is more or less in line with its estimated 18 percent YoY rise

Trent's revenue growth has beaten Citi's 15.3 percent rise expectations. Higher store additions drive revenue, the brokerage said, adding that it remains cautious due to competition and weak revenue per sq ft trend. It has maintained its 'Sell' rating with a target price of Rs 4,350 apiece.

HDFC Securities on Trent:

HDFC Securities upgraded Trent shares to 'Add', with a target price of Rs 4,700 apiece. This implies an upside potential of more than 6 percent from the stock's previous closing price.

"Trent remains a top-class franchise. A combination of healthy inputs for future operational KPIs (SSSG and store expansion) and a c.50% valuation cut (117x FY28 P/E to 60x FY28 P/E) underpins our decision to upgrade Trent to an ADD rating with an SOTP-based TP of 4,700/share," it said.

Trent share price history:

Trent shares have fallen around 27 percent in the past six months, and over 42 percent in the past one year. This came after the stock rallied over 480 percent in the past five years.

The stock currently has a P/E ratio of more than 103.

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