Trent Shares Rise After Q2 Net Profit Grows 25%, Brokerages Issue Mixed Outlooks

Shares of Tata Group retailer Trent experienced a positive trading session on Friday, surging up to 7 percent before closing 5.44 percent higher at ₹3,017.30 on the National Stock Exchange (NSE). The stock movement followed the company's financial results for the July–September 2026 quarter.

For the quarter, Trent reported a 25 percent year-on-year increase in consolidated net profit, reaching ₹468 crore. According to financial reports, this growth was supported by the expansion of the Zudio fashion chain, strong revenue growth in the Star grocery segment, and improved operating margins.

Despite the positive quarterly performance, major brokerages adopted contrasting stances on the stock's future outlook, issuing varying price targets.

Bernstein maintained an 'outperform' rating on Trent with a target price of ₹3,500. The brokerage noted the company's margin improvements, though it also flagged slower store additions and declining revenue productivity.

HSBC maintained its 'buy' rating and raised its target price to ₹3,480 from ₹3,390. The firm expects growth momentum to continue into the second half of fiscal year 2027, driven by the expansion of Westside and Zudio. HSBC anticipates that the annual store-opening pace will remain steady, with a continued focus on Tier II and peripheral markets. The brokerage also raised its FY27 EBITDA estimate by 7 percent and its FY28–29 estimates by 2 to 3 percent.

In contrast, Jefferies maintained a 'hold' rating while lowering its target price to ₹3,300 from ₹3,435. The firm retained its annual guidance of opening 200 to 250 Zudio stores and 50 Westside stores, pointing to emerging categories, online channels, and expansion into smaller cities as key drivers. However, Jefferies cited input-cost inflation and competitive pressures as reasons for reducing its valuation multiples.

Citi maintained a 'sell' rating on the stock and reduced its target price to ₹2,815 from ₹2,950. While Citi raised its FY27–29 revenue estimates by approximately 2 percent due to improving consumer sentiment, it cut its FY27 and FY28 earnings per share estimates by 6 percent and 3 percent, respectively, citing valuation concerns and input-cost risks.

In leadership updates, Noel N Tata is set to step down as chairman after nearly three decades of association with the company.

"Trent's latest quarterly performance demonstrates the strong retail demand driving India's consumer sector, particularly through formats like Zudio and Westside. However, the divided stance among brokerages highlights the delicate balance between top-line expansion and operational challenges such as input-cost inflation and valuation pressures. For retail enterprises, scaling up in Tier II and smaller markets remains a viable growth strategy, but maintaining revenue productivity alongside store additions will be crucial for sustained profitability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes