Trent shares jump 6% after strong operational Q2 results; Check latest price targets

Shares of Tata Group retailer Trent Ltd. opened with gains of over 6% on Friday, October 30, after the company reported its September quarter results, with operating performance ahead of analyst estimates, supported by margin expansion and growth in its Star business.

The company’s consolidated EBITDA stood at ₹1,078 crore, compared with the CNBC-TV18 poll estimate of ₹896 crore. The EBITDA margin came in at 18.4%, ahead of the estimated 15.7%.

Profit after tax (PAT), however, was marginally below expectations at ₹468 crore against the poll estimate of ₹475 crore.

Trent had reported revenue growth of 22% in its Q2 business update. Its like-for-like growth in the fashion portfolio was in the mid-single digits during the quarter.

Emerging categories, including beauty and personal care, innerwear and footwear, contributed 21% to revenue. Its Star business reported revenue growth of over 20% during the quarter.

The company said consumer sentiment remained broadly positive, although inflation across various cost categories continued to remain elevated.

What brokerages are saying

Jefferies has maintained its 'Hold' rating on Trent, with a price target of ₹3,300. The brokerage said that while revenue growth was already known from the company's pre-quarter business update, margin expansion drove a 37% year-on-year increase in pre-Ind AS EBITDA. However, the metric came in below its estimates.

Fashion LFL growth improved to the mid-single digits during the quarter, despite a shift in festive seasonality, Jefferies said.

The brokerage expects the results to support investor sentiment and could lead to a positive near-term reaction in the stock. However, it cautioned that higher input costs could weigh on margins in the near term and potentially affect demand.

HSBC has retained its 'Buy' rating on Trent and a price target of ₹3,480. The brokerage said the company's Q2 EBITDA was around 2% ahead of its estimates, supported by gross margins holding up better than expected despite anticipated raw material cost pressures.

LFL growth in the fashion business also improved to the mid-single digits, compared with low-single-digit growth in Q1 FY27, despite the shift in festive seasonality.

HSBC has raised its FY28 EBITDA estimate by 2%, while marginally lowering its earnings per share estimate due to changes in its assumptions on other income.

Citi has maintained its 'Sell' rating on Trent, with a target price of ₹2,815. The brokerage said revenue and EBITDA grew 23% and 30%, respectively, year-on-year, coming in 4% and 1% above its estimates. However, a 71% year-on-year decline in other income meant that profit after tax grew by 9%, 3% below its estimate.

Citi identified gross margin expansion as a key positive surprise. Gross margins improved by 121 basis points year-on-year despite raw material inflation.

The brokerage also said that pre-Ind AS rent and operating expenses per square foot declined 8% and 11%, respectively, while employee costs per square foot increased 5%. Fashion LFL growth was in the mid-single digits, although revenue per square foot declined 8.4% year-on-year.

Citi said the sustainability of margins amid raw material and operating cost inflation in the second half of the financial year would be a key factor determining the stock's performance.

While the brokerage continues to like Trent's business model and execution track record, it said it would wait for more attractive valuations and/or a successful scale-up of newer pilot formats before adding exposure to the stock.

Nuvama Institutional Equities has maintained its 'Buy' rating on Trent but lowered its price target to ₹3,466 from ₹3,591 earlier.

The brokerage said Trent reported standalone revenue, operating EBITDA and adjusted PAT growth of 23%, 38% and 9%, respectively, year-on-year, supported by mid-single-digit like-for-like growth.

Operating EBITDA margin expanded by 150 basis points, aided by a 121-basis-point improvement in gross margin and operating leverage on other expenses.

Nuvama noted that management had flagged supply chain disruptions but was addressing them through wider engagement with suppliers. The brokerage also highlighted a pick-up in growth at Star, which reported a 20% year-on-year increase in revenue after five quarters of slower growth.

The brokerage has revised its revenue and EBITDA estimates for FY27 and FY28. It raised its FY27 revenue and EBITDA estimates by 1.4% and 1.9%, respectively, while revising its FY28 estimates by 0.3% and -0.3%, respectively.

Nuvama said Trent was trading at 70 times and 57 times its estimated FY27 and FY28 earnings per share, respectively.

Separately, Trent’s board has approved the appointment of Bahram Vakil as chairman, following Noel N. Tata’s retirement from the position with effect from November 11, 2026.

Trent shares ended 1.79% lower at ₹2,861.70 on Thursday. The stock has remained broadly flat so far in 2026.