Beaten-down stocks Part 1: Why Trent may be attractive bet at present level

Trent has seen a 36.5% drop in its share price in the last 12 months and offers an attractive combination of low valuation, earnings resilience in recent quarters, and a relatively high RoNW of 29%

The equity market has stumbled after two straight years of double-digit gains. The benchmark BSE Sensex fell 4.8 per cent in the 12 months to September 2025 — its weakest performance in over a decade. In contrast, the index had risen 28.1 per cent in the year to September 2024 and 14.6 per cent in the preceding year. With this, the Sensex has now delivered negative returns in three of the past six years ending September.

 

One silver lining is that the recent decline has pulled equity valuations down from the record highs of 2024. Many blue-chip stocks are now trading at relatively attractive levels, creating opportunities for long-term investors. However, caution is warranted as broader market valuations remain above long-term averages.

 

Within this context, retail major Trent has stood out. Its stock has dropped 36.5 per cent over the past year, but it combines low valuations with earnings resilience in recent quarters and a robust return on net worth of 29 per cent. This mix provides both downside protection and potential upside when market sentiment improves. 

 

Why buy Trent?

 

• Improving margins: While revenue growth has moderated in recent quarters, margins have strengthened on the back of tighter cost control. These gains are expected to sustain, supported by the company’s firmwide RFID rollout, which is driving superior employee cost efficiency.
• Expansion-led growth: Store additions are set to accelerate as Trent targets a larger slice of the fast/value-fashion market through its Westside and Zudio formats, alongside new concepts like Utsa.
• New growth levers: The company’s entry into affordable beauty and lab-grown diamonds opens fresh avenues for expansion.
• Positive outlook: Antique Stock Broking remains bullish on Trent, citing its disciplined focus on store experience, profitability, and return ratios, combined with steady scaleup of operations. 

   

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