Analysts cut targets for Trent amid slowing growth, weak consumer sentiment

While Trent reported strong profit and revenue growth, several brokerages have slashed their target prices, citing slowing growth momentum and weak consumer sentiment

Trent, one of India’s leading retail giants, has faced a mixed reaction from major brokerages following its December quarter of financial year 2025 (Q3FY25) results. While the company reported strong profit and revenue growth, several brokerages have slashed their target prices, citing slowing growth momentum and weak consumer sentiment.

 

Trent reported a 32.8 per cent year-on-year (Y-o-Y) increase in consolidated profit at Rs 497.3 crore versus Rs 374.4 crore in Q3FY24. The revenue surged 34.3 per cent Y-o-Y to Rs 4,656.6 crore, compared to Rs 3,466.6 crore last year. At the operating level, Ebitda also saw a healthy rise of 34 per cent Y-o-Y to Rs 841.9 crore, although its margin dipped slightly to 18.08 per cent from 18.13 per cent a year ago.

 

However, the retail giant faced headwinds, with a moderation in like-for-like (LFL) growth due to weak consumer spending and store consolidation efforts. The slowdown in LFL growth, which stood in the high single digits, was a key factor driving the downward revision in revenue and profit estimates for FY25 and FY26.

 

Target cuts across brokerages

 

Analysts at domestic brokerage Nuvama lowered its target price, bringing it down to Rs 6,662 from Rs 7,475 earlier. The brokerage acknowledged Trent’s industry-leading growth but highlighted that upcoming store upgrades and consolidations could limit overall net store growth in the near future. The brokerage has maintained its ‘Buy’ rating. 

 

“Accounting for softness in growth momentum, we are tweaking revenue estimates down by 2 per cent/4 per cent for FY25/26 and PAT estimates by 12.7 per cent/13.3 per cent for FY25/26,” Nuvama said, in a note.

 

Citi, too, reportedly cut its target to Rs 7,800 from Rs 9,350, citing a moderation in LFL growth due to weaker discretionary consumption and a higher base. Despite this, Citi praised Trent’s operational performance, which remains strong relative to peers. The brokerage has also maintained a ‘Buy’ rating on the stock.

 

Jefferies, with a 'Hold' rating, reduced its target price to Rs 5,800 from Rs 5,900, reflecting a cautious stance on the stock, according to reports. While the company’s earnings met expectations, Jefferies noted that the earnings upgrade cycle had stalled, and valuations were no longer attractive. The brokerage has also cut EPS estimates by 1-9 per cent for FY25-27.

 

Bernstein reportedly trimmed its target to Rs 6,900 from Rs 8,100, while maintaining 'Outperform' rating, as its called Q3 results a ‘mixed bag.’ While store additions remained positive, Bernstein flagged the lower same-store sales growth (SSSG) as a concern. The brokerage expects a recovery in SSSG to double digits as consumption picks up over the next few years.

 

Morgan Stanley maintained an 'Overweight' but also lowered its target to Rs 8,032, acknowledging a slight topline miss and weak performance in the fashion segment. However, Morgan Stanley was optimistic about the company’s store portfolio optimisation strategy and the strong performance of its Star business, which saw a 25 per cent revenue growth. 

Those at Motilal Oswal noted that Trent continued its strong performance with high-single-digit LFL growth and solid store additions, despite weak discretionary demand.  The brokerage has reduced the target price to Rs 7,350 and maintained a ‘Buy' rating.

 

Analysts at HDFC Securities, meanwhile, maintained their FY26/27 estimates and retained ‘Sell’ with a target price of Rs 4,200. 

 

That said, while Trent continued to show resilience with strong profit and revenue growth, brokerages have adjusted their outlooks, citing a slowdown in growth momentum and valuation concerns. Despite the target cuts, several brokerages maintain a positive view, reflecting the company's potential in the long-term.

 

On the bourses, following Q3 results, Trent share price closed 8.28 per cent at Rs 5,275. In comparison, BSE Sensex settled 0.27 per cent at 78,058.16, on February 6, 2025.