Trent Share Price Rises After Q1 Results: Smart Play or Overhyped? Here’s What You Need to Know

Trent shares rose after Q1 FY26 results showed profit growth and improved margins. Should you buy, sell, or hold the stock now? Full expert breakdown here.

What happens when a market darling starts to slow down, but still delivers solid profits?

That’s the question buzzing around Trent Ltd., the Tata Group’s rising star in retail, after its Q1 FY26 results. The company posted another profitable quarter, the stock price nudged up, and big brokerages weighed in with their target prices.

But here’s the twist: while profit and margin numbers improved, the revenue growth slowed—and not everyone’s impressed.

So what does this mean for investors like you? Should you jump in now, wait for a dip, or stay away altogether?

Let’s break down what the numbers say—and more importantly, what they don’t.

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🏪 Who is Trent Ltd and Why Does It Matter?

Trent Ltd. is a Tata Group company that runs popular retail chains in India like Westside, Zudio, and Star.

• Westside – Fashion-forward and mid-premium
  
• Zudio – Fast-fashion for the budget-conscious
  
• Star – Trent’s play in the food & grocery segment
  

Over the past few years, Trent has been one of the few Indian retailers with consistent growth, strong store expansion, and margin discipline. In fact, its stock price has multiplied over 5x in the last five years.

But as every investor knows, the past isn’t always prologue. Let’s look at the fresh results.

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📊 Q1 FY26 Results: Profit Up, Growth Slows Down

Trent reported a 9.5% YoY rise in consolidated net profit to ₹425 crore for the quarter ended June 2025. Revenue rose around 20% YoY to ₹4,781 crore.

Now, that sounds good on the surface—but here’s the catch:

• This was Trent’s slowest profit growth in over two years
  
• The revenue increase was below many analysts’ expectations
  
• Same-store sales saw low single-digit growth, down from double digits last year
  

Still, there was a silver lining. Operating margin (EBIT) improved from 10.6% to 11.4%, thanks to:

• Lower employee expenses (down 7% YoY)
  
• Efficient store management despite expanding footprint
  
• Smart sourcing and operational efficiency
  

🧠 What You Should Remember:

Trent’s top line growth has cooled, but the bottom line is still strong. The company is managing costs better, which helped margins even in a slower environment.

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📈 Stock Reaction: How Did the Market Take It?

After the earnings were announced:

• The share price initially rose nearly 2%, touching ₹5,440 on August 7
  
• Later, it settled around ₹5,396.50, still up 1% for the day
  
• Over the last 5 days, the stock is up about 8%
  
• But over the past 1 month, it’s down 2%
  
• The current P/E ratio is around 125 — which is considered high
  

So the market seems cautiously optimistic. But with such a high valuation, investors are watching future growth more closely than ever.

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🧠 Why the Valuation is Getting Attention

Let’s break this down like a cricket match:

• Trent is like a batsman with a stellar average (profits)
  
• But now, the strike rate (revenue growth) is dipping
  
• If the batsman keeps scoring, great. But if the pace drops too much, pressure builds
  

That’s exactly what’s happening here. A P/E of 125 means investors expect fast growth. Any sign of slowing can lead to profit-booking or short-term dips.

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🧐 What are Brokerages Saying?

1. Motilal Oswal

• Rating: Buy
  
• Target Price: ₹6,400
  
• Key Quote: “Margin beat led by strong cost control. However, growth in Star business and revenue acceleration are key triggers.”
  

2. Bernstein

• Rating: Outperform
  
• Target Price: ₹6,500
  
• View: Likes Trent’s execution, but cautious on revenue per sq. ft. decline.
  

3. Citi

• Rating: Buy
  
• Target Price: ₹7,150
  
• Note: Revenue growth is slowing, but Trent is still outperforming peers.
  

4. Nuvama Institutional Equities

• Rating: Hold
  
• Target Price: ₹5,850
  
• Note: Appreciates margin strength but flags slowing store productivity.
  

🧠 Summary:

Brokerages are mostly bullish but cautious. Most see potential, but agree that future revenue growth will make or break the rally.

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🚨 What’s Driving the Slowdown?

Here’s what’s behind the numbers:

• Muted Urban Demand: Footfalls have dropped post-festive season.
  
• Monsoon Impact: Early rains reduced in-store visits.
  
• High Base Effect: Last year’s strong performance makes YoY growth harder.
  
• Competition Rising: Reliance Retail, Aditya Birla Fashion, and DMart are all fighting for the same pie.
  

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🔍 Should You Buy, Sell, or Hold?

✅ Reasons to Buy:

• Strong brand portfolio with loyal customer base
  
• Store expansion still ongoing (Zudio is expanding aggressively)
  
• High efficiency in operations and margin improvement
  
• Support from Tata Group brings long-term credibility
  

❌ Reasons to Wait or Be Cautious:

• Slowing revenue growth, especially in Star and Westside
  
• High valuation (P/E > 120), which increases downside risk
  
• Weakness in revenue per sq. ft., indicating productivity pressure
  

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🔮 What Could Drive the Next Leg of Growth?

If you’re thinking long-term, here are potential growth levers:

• Zudio’s Expansion: Expected to enter Tier 2 and 3 cities rapidly
  
• Emerging Categories: Beauty, Innerwear, Footwear are seeing pilot scale-ups
  
• E-commerce & Omni-Channel: Investment here could boost topline
  
• Improved Star Performance: Still present in only 10 cities — large runway ahead
  

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🎯 Final Thoughts

Trent is not broken, but it’s slowing down. The company is still profitable, efficient, and well-managed. However, at a premium valuation, investors expect acceleration, not moderation.So if you’re already invested — this is a hold with a sharp eye on next quarter’s numbers.
If you’re looking to enter — consider waiting for either a stronger earnings beat or a stock price correction.