Trent shares slide 9% as Nuvama downgrades on slower growth outlook flagged at AGM
Trent Ltd
fell as much as 8.7% to Rs 5,652 on the National Stock Exchange on Friday after the company flagged a slowdown in revenue growth at its Annual General Meeting (AGM), prompting brokerage Nuvama to downgrade the stock to 'hold' and slash its target price to Rs 5,884 from Rs 6,627.
At the AGM,
Trent
said it expects revenue growth in the first quarter of FY26 to be around 20%, a marked slowdown from the 35% compounded annual growth rate (CAGR) the company delivered between FY20 and FY25. The projection also falls short of the company's own stated goal of sustaining a 25% CAGR over the coming years.
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Nuvama flagged the deceleration as a key concern, saying, 'At its AGM, Trent disappointed on near-term growth expectations in its core fashion business, which is expected to deliver ~20% growth in Q1FY26E, sharply down from its five-year CAGR of 35% (FY20–25). Management reaffirmed their aspiration of 25%-plus growth for the coming few years, but the current run rate falls short of it.'
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In response, Nuvama revised down its earnings forecasts, cutting FY26 and FY27 revenue estimates by 5% and 6% respectively, and trimming EBITDA estimates by 9% and 12%.
The brokerage said the moderation in growth forced it to reassess Trent's earnings outlook and valuation, leading to a cut in its estimates and a more cautious investment stance.
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Focus shifts to new verticals
Despite the downgrade, Nuvama acknowledged the company's long-term ambitions and execution track record, particularly its reiterated target of scaling revenue tenfold over the coming years—a vision first laid out in FY23. At the AGM, management noted that revenue has already doubled since that target was announced.
'This growth will be backed by robust additions of ~250 stores across formats as per management guidance, whose tone has historically been conservative. Accordingly, we remain confident of management beating this given the execution track record,' Nuvama said.
The brokerage identified Zudio Beauty and Star Bazaar as potential future growth drivers but cautioned that both businesses 'need to stabilise before scaling up.'
Key AGM highlights
Star Bazaar potential:
Trent Hypermarket (Star Bazaar) could outpace Westside and Zudio in scale, driven by the larger size of India's food retail market.
No merger with Big Basket:
Star Bazaar will continue focusing on Trent's own branded offerings, with no plans to merge operations with Big Basket, which is considered relatively more expensive.
Progress on 10x goal:
Management reaffirmed the company's 10x revenue goal announced in FY23, noting that revenue has already doubled since then.
Aggressive store expansion:
The company aims to add more than 250 stores across all formats in FY26 and could add more depending on market conditions and property availability.
Valuation concerns linger
Trent shares
have surged nearly 70% so far in 2025, reflecting investor optimism around its growth trajectory. However, Nuvama warned that such rich valuations are difficult to justify amid signs of slowing momentum.
'Underwhelming near-term growth prompts the downgrade to 'HOLD' as the current valuation is too demanding. A significant jump in growth profile, or pickup in other levers i.e. Star Bazaar, Zudio Beauty remain the key risks to our view,' the brokerage concluded.
Also read |
Trent stock showing signs of bottoming out; stock still down over 25% from highs – what should investors do?
Q1 update
Following the downgrade and AGM commentary, the company released its first quarter business update after the market opened on Friday.
Trent reported standalone revenue from sale of products (including GST) at Rs 5,061 crore for the April–June quarter of FY26, compared to Rs 4,228 crore in the same quarter last year, reflecting year-on-year growth of 20%, in line with its earlier guidance.
As of June 30, 2025, Trent's store portfolio stood at 248 Westside stores, 766 Zudio stores (including two in the UAE), and 29 outlets across other lifestyle concepts.
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