Tata Group's retail arm falls by..., loss from peak by...
The stock reversed its bullish streak in early July after gaining ground from its April lows and posting gains over the following two months as investor sentiment weakened following management commentary about slower near-term growth in its core fashion business—the key driver of growth in recent quarters. What does Trent expect?
At its 73rd Annual General Meeting (AGM), Trent lowered its near-term growth expectations, projecting a 20% growth in its core fashion segment for the first quarter of the current fiscal year—well below its five-year CAGR of 35% (FY20–25). The company attributed the slowdown to a weak consumption environment, geopolitical headwinds, supply-side constraints, and the early onset of monsoons, reports Mint.
While some of these challenges are seen as one-off, domestic brokerage firm Kotak Institutional Equities expressed concern over the faster-than-expected decline in revenue throughput. The brokerage pointed out that the company's revenue trajectory continues to weaken—from a strong 57% YoY growth in 1QFY25 to 29% in 4QFY25 and further down to 20% in 1QFY26, adds the Mint report. What are the other factors?
Apart from the one-off factors cited by the company, Kotak believes the contraction also stems from higher store densities in key cities, which are impacting per-store revenue, and from new store openings in Tier 2 cities, where throughput remains lower. This has led the brokerage to factor in revenue throughput contraction for FY2026.
Trent added only one Zudio store and no new Westside stores in 1QFY26. While store additions fell short of expectations, Kotak is not overly concerned, as it anticipates a pickup in the second half of FY26, with most additions likely in the fourth quarter.
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