Shares of Tata Group retail arm Trent Ltd suffered their sharpest single-day decline in six months on Tuesday after the company’s third-quarter business update fell short of market expectations, triggering a wave of selling across the counter.
The stock ended the session down 8.5 percent at ₹4,055, wiping out more than ₹13,500 crore in market capitalisation. The fall followed investor disappointment over slower revenue momentum and concerns that current earnings growth may not justify the company’s premium valuation.
Market participants had been factoring in high double-digit revenue growth for the December quarter. However, analysts said Trent’s latest update pointed to year-on-year growth closer to the mid-teens, raising questions around the pace of expansion amid a broader slowdown in discretionary consumption. Same-store sales growth and revenue per square foot are also showing signs of moderation, adding to investor unease.
At current levels, Trent continues to trade at elevated multiples. Analysts estimate the stock is valued at roughly 70 to 90 times forward earnings, levels that leave little room for error. According to brokerage assessments, even a sustained growth rate of 25 percent may be difficult to achieve going forward, given the company’s already extensive store network and increasing urban saturation.
Trent had been one of the strongest performers in India’s retail space, delivering returns of nearly 1,700 percent since its March 2020 lows. However, momentum has reversed over the past year. The stock has declined around 40 percent in 2025 so far, significantly underperforming the benchmark Nifty index.
The weakness in Trent also weighed on sentiment across the retail sector. Shares of V2 Retail, Aditya Birla Lifestyle Brands and Shoppers Stop closed lower, while Avenue Supermarts and Aditya Birla Fashion and Retail managed modest gains.
Brokerages cautioned that recent gains in Trent’s share price were driven by expectations of a growth revival. With those expectations now tempered, analysts believe earnings downgrades could continue in the near term, prompting investors to reassess exposure until clearer signs of acceleration emerge.
