Why Trent’s Share Price Is Falling After Strong Q2 Results?

Despite posting another quarter of healthy growth in both sales and profit, Trent’s stock is down around 7% today. The results looked strong on paper, but investors seemed unimpressed.

Numbers alone don’t always tell the full story. To understand why the market turned cautious, we need to look a little deeper into what the latest quarter revealed. Let’s go step by step to see what changed and why Trent’s share is reacting this way.

1. Growth Is There, But Slower Than Expected

In Q2 FY26, Trent’s consolidated revenue from operations rose 16% year-on-year to ₹4,818 crore, compared to ₹4,157 crore last year. That’s a healthy increase, but investors were expecting faster growth because Trent has been expanding at a much higher pace in previous quarters.

The company’s fashion brands like Westside and Zudio continue to do well, but sales from existing stores (like-for-like growth) were only in low single digits. This means the old stores didn’t sell much more than last year. For a company that trades at a high valuation, such slow same-store growth worries investors.

2. Weak Consumer Demand and Weather Impact

Management clearly mentioned that consumer sentiment was muted in this quarter. People spent cautiously because of unseasonal rains and the transition to the new GST structure. Many shoppers focused on buying big-ticket items that had tax benefits after the GST change, while small lifestyle and fashion products saw less demand.

This weaker demand especially hit Trent’s core fashion business. It wasn’t a permanent issue, but it affected near-term sales growth and hurt market confidence.

3. Expansion and New Brand Costs Pressured Margins

Trent’s operating profit margin came down slightly, from 11% last year to around 10% now. That’s because the company is spending heavily on expansion and new launches.

In this quarter alone, Trent opened 63 new stores across brands, including Westside, Zudio, and its new youth brand “Burnt Toast.” Expanding into smaller Tier 2 and Tier 3 cities takes time to become profitable. New stores add costs such as rent, staff, marketing, and setup, all of which reduce margins in the short run.

These costs are investments for the future, but right now they make profits look smaller.

4. Grocery Business (STAR) Faced Temporary Drop

Trent also runs a grocery chain called STAR, which saw a small decline in revenue, from ₹898 crore last year to ₹879 crore this quarter. Some stores were under renovation, which affected sales.

While this part of the business is much smaller than fashion, it still pulled down overall growth slightly. Grocery retail also runs on low margins, so even small changes can affect profitability.

5. High Valuation Means Even Small Misses Hurt

Even after this correction, Trent still trades at a price-to-earnings (P/E) ratio of about 90, which is very high for a retail company. When a company is valued this richly, even a small slowdown or margin decline can trigger selling.

Trent’s consolidated profit after tax rose just 11% year-on-year to ₹373 crore. That’s solid in absolute terms but not enough to justify such high valuations. Investors expecting 20-25% earnings growth got cautious, which led to the sharp 7% fall in the stock.

6. The Growth Story Is Intact, But Market Is Repricing

It’s important to note that nothing is “broken” in Trent’s business. The company now operates over 1,100 stores across 251 cities, with a total retail area of 14.7 million square feet.
Online sales from Westside.com and Tata Neu grew 56% in this quarter, contributing over 6% of total Westside revenues, which shows that the brand is adapting well to new shopping trends.

So, the long-term story remains strong—but the market is adjusting its short-term expectations.

Key Takeaways for Investors

• Growth has slowed, not stopped: Revenue rose 16%, but same-store sales grew very little.
• Margins are slightly lower: Expansion and new brand launches like Burnt Toast increased costs temporarily.
• STAR grocery revenue dipped: A small drag from store upgrades and weak consumption.
• Stock correction was valuation-driven: At 90x P/E, the market reacts sharply to even small disappointments.
• Business fundamentals stay strong: Store network, digital sales, and brand strength remain solid.

Final Thoughts

Trent’s recent fall is not a sign of trouble, it’s a sign of expectation adjustment. After years of rapid growth, the company has entered a more balanced phase. Revenue is still growing, new markets are opening up, and its online presence is scaling fast.

The short-term pressure on margins and demand looks temporary. For long-term investors, this correction could be a healthy pause rather than a warning signal. A company that’s still expanding across India, launching new brands, and maintaining profitability, even after a tough quarter, is one that’s building for the next decade, not just the next quarter.

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