Brokerages are split on the Tata Group-owned retail company Trent Ltd.'s second quarter progress. Morgan Stanley has maintained an 'overweight' rating on the stock, with a target price of Rs 3,406, while Citi has a 'sell' call on the stock and Goldman Sachs remains neutral.
Trent's standalone revenue jumped 23% to Rs 5,788 crore year-on-year as of Sept. 30, 2026. Store count stood at 1,342, wherein 10 Westside stores and 11 Zudio stores were added.
MS called Q2 growth as strong and neat, with revenue accelerating to 23% from 16-20% in past 5 quarters. The brokerage remains watchful of margins while outlining that the better-than-expected revenue growth should be viewed positively, especially in the context of shift in the festive calendar.
Citi, on the other hand, said that a lower-than-expected store expansion and a 8.4% decline in the average revenue per square foot keeps it cautious, especially in the context of risk to margins from input cost inflation.
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The brokerage maintained a 'sell' call on the Tata Group retailer, with a target price of Rs 2,950, implying an upside of roughly 14.5%, lower than MS' expectation of a 32.7% upside.
"In 1HFY27, Trent has added 56 net stores (vs 58 in 1HFY26 and 243 in FY26). Sustained improvement in revenue per sq ft trend bundled with store expansion can drive further re-rating," Citi noted, while adding that it remains cautious on the firm given a still-weak revenue per sq ft trend, increasing competition, impact of cannibalization, and risk to margins from input cost inflation.
Goldman Sachs has maintained a 'neutral' rating on Trent, but has hiked its price target to Rs 3,010 from Rs 2,960 factoring in the Q2 revenue beat. However, the brokerage remains hawkish in regards to the impact of raw material costs going ahead.
"Since most of the merchandise buying for 1Q was done by March, RM inflation pressure did not show up in 1Q gross margin. However, we expect RM costs to be elevated in 2Q and 3Q. We also expect to see elevated employee costs given the recent hikes in minimum wages," GS underscored.
Accordingly, while the brokerage has raised its earnings per share (EPS) estimates by 2% for financial year 2026 to 2029, pricing in an increase in its sales growth expectations, it still remains neutral on the stock.
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