Shares of Trent Ltd. fell by 2.5% to ₹4,873 in morning trade on March 10, making it one of the top Nifty 50 losers. The decline came after Kotak Institutional Equities maintained a ‘Reduce’ rating on the stock, citing concerns over revenue throughput and store expansion challenges.

Kotak Lowers Estimates, Cites Revenue Pressure

• Kotak revised its FY26-27 earnings per share (EPS) estimate downward by 1-5%, citing diluted revenue per store due to high-density store openings in Westside and Zudio.
• The brokerage set a price target of ₹5,150, which dampened investor sentiment.
• Despite strong overall financial performance, store consolidation and moderating demand could impact growth.

Competition Concerns Amid Shein's Relaunch in India

Trent’s stock has been highly volatile amid concerns about growing competition in the value fashion segment.

• Reliance Retail is relaunching Shein in India, posing a direct challenge to Zudio and Aditya Birla Fashion.
• However, Goldman Sachs remains bullish on Trent, calling recent weakness a buying opportunity with a target price of ₹8,300.
• The brokerage believes Zudio will gain market share despite competitive risks.

Trent's Stock Performance and RSI Levels

• With Monday’s decline, Trent’s RSI dropped to 39.7, placing it in neutral territory.
• The stock is down 41% from its all-time high of ₹8,345, which was hit in October 2023.

Trent’s Q3FY25 Performance

Despite concerns over revenue moderation, Trent posted strong financial results in Q3FY25:

• Net profit surged 34% YoY to ₹496.54 crore (from ₹370.64 crore in Q3FY24).
• Revenue from operations increased 34% YoY to ₹4,656.56 crore.
• Gross margin compressed by 124 basis points to 44.7%, primarily due to a shift in product mix and no end-of-season sale (EOSS) in Q3FY25.

Store Expansion and Future Outlook

Trent continues to expand aggressively, but analysts suggest upcoming store consolidations may slow overall net growth.

• The company opened 82 new stores and closed 6 stores, bringing the total store count to 907.
• In Q3FY25, 76 new Westside/Zudio stores were added, but future upgrades and consolidations could impact store expansion pace.

While Trent remains a strong player in the retail fashion sector, rising competition, store expansion concerns, and moderating revenue growth have weighed on its stock performance. Investors will closely watch store efficiency metrics, future earnings reports, and competitive positioning to gauge Trent’s long-term potential.

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