Trent Q2 Update: Stock Down 2% After Revenue Growth of 17% YoY

Trent has released its Q2 FY26 business update, reporting another quarter of strong revenue growth and steady store expansion. However, the company’s stock fell about 2% today, as investors turned cautious despite healthy topline numbers.

Revenue Growth Remains Strong

Trent reported standalone revenue of ₹5,002 crore for Q2 FY26, marking a 17% year-on-year increase compared to ₹4,260 crore in the same period last year.

The company continues to benefit from strong traction across its fashion and lifestyle formats, led by Zudio and Westside.

Store Expansion

As of 30 September 2025, Trent operated:

• 261 Westside stores
• 806 Zudio stores (including three in the UAE)
• 34 stores across other formats

During the quarter, it added 13 new Westside stores and 40 Zudio stores, underscoring its focus on widening its retail footprint across the country.

Q1 Recap: Previous Quarter Update

In Q1 FY26, Trent delivered healthy growth across key financial metrics:

Operating margins were stable at 11, indicating efficient cost management despite the pace of expansion. Total store count crossed 1,000, with a retail area of approximately 13.6 million sq. ft.

Read more about its Q1 performance on our previous blog by clicking here

Why the Stock is Under Pressure

Despite the solid revenue growth, Trent’s stock declined as investors reacted cautiously. Several factors are contributing to this sentiment:

• High Expectations and Valuations: Trent trades at premium valuations. In such cases, even strong numbers need to exceed expectations to drive the stock higher. A 17% revenue growth, while healthy, may not have been enough to justify elevated pricing.
• Signs of Growth Moderation: In the previous quarter, revenue growth had slowed compared to Trent’s historical pace of over 30% annually. This has made investors more sensitive to any signs of further moderation.
• Cost and Margin Concerns: Rising depreciation, higher tax outgo, and pressure on other income in recent quarters have raised concerns about future profitability.
• Competitive Landscape: Increasing competition in fashion retail, including the entry of new players, could impact Trent’s growth trajectory if not managed carefully.

Together, these factors have led investors to adopt a more measured stance, resulting in a stock decline despite otherwise positive headline numbers.

Key Takeaways for Investors

1. Strong Core, but Expectations Are High: Trent continues to execute well on revenue growth and expansion, particularly through Zudio. However, at current valuations, the market is demanding more than steady performance, it expects outperformance.
2. Margins and Same-Store Growth Will Be Crucial: With rapid expansion underway, maintaining profitability will be key. Investors should track margin trends and same-store sales growth closely in the coming quarters.
3. Competitive Pressure Is Rising: Increased competition in the value fashion segment could challenge Trent’s growth trajectory. Monitoring pricing strategies and store productivity will be essential.
4. Execution Quality Will Decide the Next Leg: Trent’s ability to balance aggressive expansion with margin protection and operational efficiency will determine whether it can justify its premium valuations.

Bottom Line

Trent’s Q2 FY26 update highlights continued strength in revenue and expansion, driven by the rapid scale-up of Zudio and stable performance from Westside. However, with valuations already pricing in strong growth, the Street is now looking for clear margin expansion and sustained same-store growth to support further upside.

Going forward, store productivity, competitive positioning, and cost control will be key to sustaining investor confidence.

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