Trent shares fall over 8% as December quarter business update fails to enthuse investors

Shares of Trent Limited, the Tata Group–owned retail chain operator, fell sharply on Tuesday, January 6, after its December quarter (Q3) business update failed to impress the market. The Trent share price declined as much as 8.34% to an intraday low of ₹4,060 on the NSE, while on the BSE the stock slipped over 8.3%, accompanied by heavy trading volumes.

Q3 revenue rises 17%, but concerns linger

In a post-market filing on Monday, Trent informed exchanges that its standalone revenue rose 17% year-on-year to ₹5,220 crore in the December quarter, compared with ₹4,466 crore in the same period last year.

During the quarter, the company expanded its store footprint significantly:

• 17 new Westside stores added
• 48 new Zudio stores opened

As of the December quarter-end, Trent operated 278 Westside stores, 854 Zudio stores (including four in the UAE), and 32 stores across other lifestyle formats.

Why Trent share price fell today

Despite healthy topline growth, investors focused on signs of slowing growth momentum and pressure on store productivity, which weighed on sentiment.

• Citi said revenue growth of 16.9% YoY beat its estimate but flagged a 15.7% YoY decline in average revenue per square foot, indicating softer productivity.
• Morgan Stanley maintained a positive outlook, citing strong store expansion momentum, but noted sequential revenue growth was lower compared with recent quarters.
• UBS remained cautious, stating there was “no respite from the weaker growth trajectory”, calling Q3 another soft quarter.

Heavy volumes signal investor caution

Trent shares saw higher-than-usual trading activity, with NSE volumes surging over four times the daily average. On the BSE as well, trading volumes exceeded recent averages, reflecting heightened investor reaction to the update.

At around mid-morning trade, the Trent share price remained over 7% lower, underperforming the broader NIFTY50, which was trading largely flat.

What investors should watch next

Market participants say Trent’s long-term story around Westside and Zudio expansion remains intact, but near-term concerns around growth sustainability, productivity per square foot, and margin trends will stay in focus.

Analysts expect further clarity from upcoming earnings, commentary on festive demand trends, and guidance on store-level profitability to determine the next move in the stock.

Disclaimer:
This article is for informational purposes only and should not be considered investment advice. Investments in the securities market are subject to market risks.