Mumbai, India – Shares of Trent Ltd., the prominent retail arm of the Tata Group, experienced a significant rally today, climbing 7% to reach Rs 3059. This surge pushed the company's market capitalization to Rs 1.60 lakh crore, making it a top gainer on both the Sensex and Nifty indices.
The impressive stock performance follows the release of Trent's Q2FY27 earnings, which largely exceeded D-Street estimates. The company reported a robust 25.3% year-on-year (YoY) increase in consolidated profit, reaching Rs 468.09 crore for the September quarter, up from Rs 373.42 crore in Q2FY26. Revenue from operations also saw a healthy rise of 21.9% YoY, totaling Rs 5,873.14 crore compared to Rs 4,817.60 crore in the prior year.
Strong Standalone Performance and Margin Expansion
On a standalone basis, Trent achieved notable growth, with revenue, operating EBITDA, and adjusted PAT increasing by 23%, 38%, and 9% YoY, respectively. This strong showing was bolstered by mid-single-digit like-for-like (LTL) growth. Operating EBITDA margins expanded by 150 basis points, primarily due to a 121 basis point gain in gross margins and enhanced operational leverage from other expenses. Management acknowledged ongoing supply chain disruptions but stated they are actively addressing these through broader supplier engagement.
The company's Star brand also demonstrated a significant turnaround, reporting a 20% YoY growth after experiencing five quarters of slower performance, indicating a positive shift in its trajectory.
Brokerages React with Upgrades and Revised Targets
Following the strong earnings report, several prominent brokerages revised their outlooks on Trent shares:
- Elara Securities upgraded the stock to a 'Buy' rating, setting a higher target price of Rs 3,600. Elara maintained Trent as its preferred pick within the retail sector, noting that a recent 7% dip from its three-month peak presented an attractive entry opportunity.
- Nuvama reiterated its 'Buy' call, though it slightly adjusted its target price to Rs 3,466 from an earlier Rs 3,591.
- MOFSL (Motilal Oswal Financial Services) assigned a 'Buy' rating and an upside of 29%, pegging its target price at Rs 3,700.
Conversely, Systematix maintained its 'Hold' rating on Trent, revising its target price downwards to Rs 3,242 from Rs 3,500. The brokerage cited potential risks including slower discretionary demand, execution challenges in aggressive store expansion, and increased competition, among others.
Trent's robust Q2FY27 performance, marked by significant profit and revenue growth, has clearly resonated with investors and analysts, solidifying its position as a strong performer in the Indian retail market.