Trent tanks after Q2 results

Trent slumped 6.81% to Rs 4310.05 after the company reported a steady performance for the September quarter.

Trent's consolidated revenue from operations rose 16% year-on-year to Rs 4818 crore and EBITDA increased 14% to Rs 575 crore, while profit after tax grew 11% to Rs 373 crore.

The company clarified that its consolidated revenue excludes sales from the Trent Hypermarket business due to accounting standards, though its share of profit from the venture is included under the equity method. The Star retail business, which now operates 77 stores after a net reduction of one outlet in the first half, continues to focus on technology upgrades and customer-centric initiatives. Trent said the format's strength lies in its competitive pricing, strong availability, and differentiated fresh and private-label offerings, which are helping it stand out and navigate an increasingly competitive retail landscape.

During the quarter, Trent launched its new youth-focused fashion brand, Burnt Toast, "with a range of bold apparel and accessories, aimed at inspiring young, dynamic individuals to express themselves. The initial customer response has been positive and encouraging."

It added, "We now operate a significant portfolio of over 1000 'large-box' fashion stores, with a presence now across 251 cities. In Q2 FY26, we opened 19 Westside and 44 Zudio stores (including 1 store in the UAE) and consolidated 6 Westside & 4 Zudio stores. As of September 30, our store portfolio included 261 Westside, 806 Zudio (including 3 stores in the UAE), and 34 stores across other lifestyle concepts. As of September 30, we operated with a footprint of over 14 million sq. ft. across our fashion brands."

The gross margin profile of Westside and Zudio remains consistent. Operating EBIT margin for Q2FY26 was 10.2% (11.0% for Q2FY25).

The company's Q2 results drew a mixed response from brokerages, with most flagging slowing revenue momentum and margin pressures. While opinions on the stocks long-term potential remained divided, several brokers trimmed their target prices, citing decelerating revenue growth, muted like-for-like sales, and store-level cannibalisation despite strong expansion. Some brokerages highlighted weak consumer sentiment, unseasonal rains, and intensifying competition as near-term headwinds, even as cost-saving initiatives and network expansion are expected to support medium-term earnings recovery.

Speaking on the performance, Noel N Tata, Chairman, Trent said, "We remain focused on portfolio growth, elevating our products and enhancing store experience for our customers. Reduction in GST rates is a welcome step and over time is likely to augur well for our product categories. The business registered steady performance during the quarter. We have consistently delivered a differentiated consumer proposition that appeals to a wider audience across diverse markets. Notwithstanding continuing competitive intensity and interim trends, we believe an unwavering focus on being relevant to our customers and building resilience with our business model choices will continue to hold us in good stead. We are excited and remain on track to build a sizable and scalable pure play direct-to-customer business across customer segments in the context of the market size and opportunity.

In our Star business, we continue to apply Trents playbook and the contribution of our own brands is now trending over 73% of revenues. The opportunity in the food space for the Star proposition is exciting at the same time it is intensely competitive. We remain convinced that this business is well poised to deliver growing consumer value in the years ahead."

Trent is part of the Tata Group and operates a portfolio of retail concepts. The primary customer propositions of Trent include Westside, one of India's leading chains of fashion retail stores, Zudio, a one stop destination for great fashion at great value and Star, which operates in the competitive food, grocery and daily needs segment.

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