Stock Of The Day: Top Nifty Stock Faces 'Sell' Calls Post 170% Rally

Shares of Trent Ltd. — top Nifty stock in 2024 — are now under bearish pressure as 'sell' calls loom following a 170% run-up last year. This was sparked by Kotak Securities, which downgraded the stock on Thursday.

The stock has already fallen over 13% in 2025, while its trades under the bearish territory after falling over 25% since its peak in October last year.

The Tata Group company's scrip will get support near the Rs 6,250 level, which is also 2 standard deviations below the 14-day moving average. A break out on the downside could sent the stock sliding towards the Rs 6,000 level.

The stock made a bullish candle in a daily time frame on Wednesday but will need to top the resistance Rs 6,650 range to see a trend continuation in the short term.

While the stock trades above the long-term sentiment gauge — the 200-day moving average — it currently is below the 14-day simple moving average and the 21-day exponential moving average.

The stock fell as much as 2.4% to Rs 6,233.1 per share on Thursday, compared to the 0.42% rise in Nifty 50. The relative strength index was at 37.

Twelve out of the 21 analysts tracking the company have a 'buy' rating on the stock, five suggest a 'hold' and four have a 'sell', according to Bloomberg data. The average of the 12-month analysts' price target implies a potential upside of 8.6%.

Kotak Securities downgraded the stock to 'sell' from 'add' and slashed the target price to Rs 5,858 per share from Rs 6,800 apiece earlier.

The strong growth story is now fully priced in, the brokerage said, adding, "After the fantastic run-up in the stock price, it may be time to book profits."

Westside store additions have disappointed while there are too many Zudio stores in select urban pockets, Kotak said. The brokerage cut its fiscal 2025-27 revenue by 1–2% and earnings per share by 9–14%.

In 2024, Trent emerged as the top-performing Nifty company in 2024, exceeding Bloomberg analysts’ expectations by 175%. This rally was driven by the company's strong financial results and aggressive retail outlet expansion, boosting investor confidence.

While the third quarter earnings will be in focus, the company's revenue grew by 40% year-on-year, propelled by the performance of Zudio and Westside stores. Ebitda margins, a key indicator of operational profitability, remained stable at 15.9%, in line with past quarters reflecting Trent's resilience despite higher rental expenses and slight declines in gross margins.