Trent, TCS shares worst Nifty performers in 2025. Why 2 Tata stocks are down at least 25% this year

Time of India

6 days ago

Trent's sharp growth slowdown has prompted analyst downgrades. Nuvama cut the stock to 'Hold' and slashed its FY26/27 estimates and target price. HSBC trimmed its target too, citing a weaker-than-expected Q1. With both Trent and TCS under pressure, the Tata Group is facing rare underperformance, highlighting how even blue-chip names are vulnerable to shifting market dynamics.
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Blue-chip stocks Trent and TCS , incidentally, both part of the revered Tata Group, have each lost over 25% so far in 2025, making them the worst-performing Nifty50 stocks this year. While IT giant TCS is down around 25%, retail favourite Trent, which operates Zudio and Westside, has seen its stock fall nearly 30% year-to-date.Once considered a classic buy-and-hold stock capable of doubling investor wealth every five years, TCS is now witnessing its worst phase since the 2008 global financial crisis, when it plunged 55% in a single calendar year. Trent, too, after delivering an 800% return over the last five years, is enduring its worst phase since 2008, at least in terms of share price performance.TCS's decline reflects broader, sector-wide headwinds rather than company-specific issues, as the entire IT industry grapples with weaker client spending in the US, macroeconomic uncertainties, and pressures stemming from AI-led transformation.The company's recent announcement to lay off nearly 2% of its workforce (about 12,000 employees) underscored the demand challenges, with Jefferies warning that it may lead to execution slippages in the near-term and higher attrition in the longer run for TCS.The IT behemoth isn't suffering alone. Shares of peers like HCL Tech Infosys , and Wipro have all posted double-digit losses as the sector faces a perfect storm of headwinds.The recent Q1 results underscored the challenges, with TCS revenue missing consensus estimates as it fell 3.3% quarter-on-quarter in constant currency terms. Total contract value of deal wins was $9.4 billion (+13% YoY) with a book-to-bill ratio of 1.27x, but notably did not include any mega deals.TCS management noted that delays in decision-making and project starts with respect to discretionary investments continued from Q4FY25 and intensified further in Q1FY26. Based on demand pipeline and expectations of discretionary demand reviving once clarity emerges on tariffs later in July/August, TCS believes revenue growth in FY26E will be better than in FY25 for major markets (with estimated FY25 growth at 1.2%).Elara recently downgraded TCS, citing delays in discretionary spending and the impact of geopolitical tensions in Europe. Given a weak Q1 and seasonal softness expected in H2, the brokerage forecasts significantly slower revenue growth in FY26 compared to FY25.Nomura has cut its FY26–28F EPS estimates by 1–2%, factoring in revenue and margin pressures. It also lowered its target price from Rs 3,820 to Rs 3,780.However, JM Financial remains optimistic, expecting TCS's growth to improve once macroeconomic uncertainty eases. TCS management has reiterated that international market revenue growth in FY26 is likely to outpace FY25, and added that if macro conditions stabilize without further delays, Q2 could be stronger than Q1.The retail juggernaut behind Zudio and Westside has seen a sharp slowdown in growth, shaking investor confidence. Trent's standalone revenue growth dropped to just 20% in Q1 FY26, a steep fall from its five-year compound annual growth rate (CAGR) of 35% during FY20–25.At its AGM, the company further dented investor sentiment by guiding for around 20% growth in its core fashion business for Q1 FY26E, well below the 25%+ growth trajectory it had previously aspired to maintain over the coming years.'The soft demand environment and sourcing issues might have impacted this below-consensus result,' HSBC analysts noted, citing supply chain disruptions from Bangladesh, which contributes to a portion of Trent's sourcing, even though over 90% of its products are manufactured in India.The growth slowdown has triggered immediate analyst downgrades, with Nuvama leading the charge by cutting Trent to 'HOLD' from a previously higher rating. 'Adjusting for the current run rate, we are cutting FY26E/27E revenue by -5%/-6% and EBITDA by -9%/-12%,' Nuvama analysts wrote, slashing their target price to Rs 5,884 from Rs 6,627.HSBC, while maintaining a 'Buy' rating, also trimmed its target price to Rs 6,600 from Rs 6,700, citing the weaker-than-expected Q1 performance. The global brokerage noted that Trent's chairman indicated at the AGM that Q1 revenues crossed Rs 50 billion, with over 20% YoY growth, well below the 34% growth expected by Bloomberg consensus and HSBC.The twin decline of these Tata Group stalwarts, TCS and Trent, reflects a broader challenge for India's premium equity markets, where even the most trusted names are not immune to sector-wide pressures and evolving market dynamics.