Trent shares fall 8% on Q3 update; is it good time to buy Tata Group stock?

Trent share price declined 8 per cent following the Q3 business update. Here's what analysts recommend for investors

Shares of Tata Group’s retail arm, Trent, were under pressure on Tuesday, January 6, dropping over 8 per cent following the company’s third-quarter results for FY26 and its performance for the nine-month period ending December 31, 2025 

According to the exchange filing, Trent’s standalone revenue from product sales (excluding GST) for Q3 FY26 stood at ₹5,220 crore, marking a 17 per cent Year-on-Year (Y-o-Y) growth from ₹4,466 crore in Q3 FY25. For the nine-month period ending December 2025 (9M FY26), standalone revenue reached ₹14,604 crore, reflecting an 18 per cent Y-o-Y increase compared to ₹12,368 crore in 9M FY25. Despite this, the Q3 FY26 revenue growth, while consistent with Q2 FY26, was lower than the pace seen in Q3 FY25, Q4 FY25, and Q1 FY26.

 

 

As of December 31, 2025, Trent’s store portfolio included 278 Westside stores, 854 Zudio stores (with four in the UAE), and 32 outlets across other lifestyle concepts. During Q3 FY26, the company opened a net 17 Westside stores and 48 Zudio stores. In the first nine months of FY26, a net 30 Westside stores and 89 Zudio stores were added to its portfolio.

 

Following the update, Trent’s share price fell by 8.34 per cent, hitting an intraday low of ₹4,060 per share on the NSE. While the stock partially recovered, it continued to trade in the red. At 10:10 AM on Tuesday, Trent shares were quoted at ₹4,125.80, down 6.86 per cent from the previous close.  

Is it a good time to buy Trent shares?

Analysts, however, remain divided on the outlook for Trent shares. Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, recommended that investors avoid fresh buying and wait either for growth momentum to recover or for a significant price correction, which would offer a more favourable risk-reward ratio.

 

Agrawal noted that Trent’s revenue growth momentum has slowed over the past three quarters, with a sharp decline in growth. Average sales growth was 45 per cent during the December 2023 to March 2025 period, compared to just 17 per cent during the June 2025 to December 2025 period.

 

"The stock is trading at a TTM PE multiple of 91x and needs to maintain robust growth momentum to justify its premium valuation. Investors are advised to avoid fresh buying and wait either for growth to recover or for a significant price correction to achieve a more favourable risk-reward," said Agrawal.

 

In contrast, HDFC Securities has upgraded its rating on Trent from ‘Reduce’ to ‘Add’, citing the company’s solid fundamentals and long-term growth potential. The upgrade follows a near 50 per cent decline in the stock from its peak, which the brokerage views as a favourable entry point. 

Jay Gandhi and Vedant Mulik, analysts at HDFC Securities, highlighted several key factors supporting the upgrade, including rapid store expansions, increased potential for same-store sales growth (SSSG) from Zudio’s network, Westside’s growing membership base, and ongoing expansion into under-retailed regions. These factors, analysts believe, will drive Trent’s future growth despite the recent price pressure. Further, the combination of healthy operational inputs for future KPIs (SSSG and store expansion) and a significant valuation cut (117x FY28 P/E to 60x FY28 P/E), they said, drove the decision to upgrade Trent.

 

HDFC Securities also raised its target price to ₹4,700 per share (earlier ₹4,300 per share), based on a sum-of-the-parts (SOTP) approach, with a 60x FY28 P/adjusted EPS for the standalone business. Additionally, it revised its FY27/28 EPS estimates upward by 1-2 per cent.

 

Meanwhile, Ravi Singh, chief research officer at Master Capital Services, attributed the fall in Trent Limited shares after its Q3 update mainly to high expectations. The business, he believes, is still growing, and store expansion continues, but margins and near-term growth commentary were not strong enough to impress the market. This led to profit booking after a long run-up. On charts, Singh said, the stock is still weak, though selling pressure is slowing. It hasn’t clearly turned up yet, so the risk of some more consolidation remains.

 

"If you already own the stock with a long-term view, holding makes sense as the stock is still trading above its key support of ₹4000. But fresh buying should be done with patience. It’s better to wait for price stability or a clear trend reversal instead of catching the fall too early," said Singh.

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(Disclaimer: The views and investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)