Share price of Trent, the Tata Group’s retail arm, slipped nearly 7% in early trade. Though the company posted an 11% year-on-year (YoY) gain in consolidated net profit for the second quarter of FY26, there are concerns about Star business. It clocked a rather muted performance with dip in revenue. Consumer sentiment is muted in Q2 as well.
Post the result, leading brokerages have come up with their outlook on the stock which remains divided. Some see long-term potential backed by store expansion and cost efficiency, while others prefer a cautious stance amid slowing growth momentum. Let’s take a look at the brokerages say on this stock –
Motilal Oswal on Trent: Sees strong upside ahead
The brokerage has maintained a ‘Buy’ rating with a target price of Rs 6,000. This indicates a 30% upside potential from current levels.
“We raise our FY26–28 reported EBITDA estimates by around 4–5%, driven by cost-saving measures. However, we cut our FY27–28 earnings by 4–5% due to higher depreciation,” the brokerage house Motilal Oswal said in its report.
It expects Trent’s standalone revenue, earnings before interest, taxes, depreciation and amortisation (EBITDA), and profit after tax (PAT) to grow at a compound annual growth rate (CAGR) of 17%, 20%, and 14%, respectively, over FY25–28.
Motilal Oswal added, “We continue to like Trent for its robust footprint additions, strong double-digit growth, long runway for growth in Star (presence in just 10 cities), and potential scale-up of emerging categories (Beauty, Innerwear, Footwear, and Large Goods Distribution). However, revenue growth acceleration remains a key trigger.”
According to the brokerage report, the recent correction has made the valuation more reasonable. “After recent correction, the stock currently trades at ~70x Dec’27E EPS, excluding the contribution from Star and Zara joint ventures,” it said.
Motilal Oswal remains optimistic about Trent’s long-term strategy but cautions that short-term performance will depend on how quickly the company can improve its profitability.
Nuvama on Trent: Stays cautious with ‘Hold’ rating
On the other hand, Nuvama Institutional Equities has taken a more guarded view of Trent’s near-term prospects. The brokerage has given the stock a ‘Hold’ rating with a revised target price of Rs 5,189, down from Rs 5,850 earlier.
According to the brokerage report, Trent’s growth has moderated as it expands deeper into Tier-2 cities and new store formats that typically take longer to become profitable.
“Trent delivered standalone revenue/EBITDA/pre-Ind AS EBITDA/PAT growth of 17%/27%/16%/6% YoY in Q2FY26. The growth momentum moderated owing to an expanding mix of Tier-2 and new stores, which have a higher gestation period than the existing network,” Nuvama noted.
The brokerage pointed out that profitability was supported by cost optimisation despite slower productivity. “Star Bazaar’s revenue decreased 2% year-on-year impacted by ongoing store upgrades,” it added.
Nuvama also adjusted its projections for the coming years. “We are tweaking revenue/EBITDA/PAT estimate for FY26 by -3.6%/-4.1%/-9.5% and for FY27 by -3%/-3.1%/-9.8%,” the report stated.
The brokerage further highlighted that while Trent’s online revenue grew 56% and now forms more than 6% of Westside’s total sales, the company’s gross margin dipped by 88 basis points year-on-year, partly due to a higher contribution from its value fashion brand Zudio.
