Trent Ltd, the retail arm of the Tata Group, witnessed a sharp sell-off on Thursday with shares plunging over 11% intraday, wiping out nearly Rs 310 crore from ace investor Radhakishan Damani’s portfolio in a single session. The decline comes amid concerns over rich valuations, profit-booking after a steep rally, and broader market weakness.
Key Highlights
- Stock Performance:
Trent shares opened at ₹4,750 on NSE, slid to a low of ₹4,261, and finally settled at ₹4,278, marking an 11.1% decline compared to Wednesday’s close of ₹4,812. - RK Damani’s Holding Impact:
As per March 2025 shareholding data, RK Damani and his entities own approximately 73 lakh shares or 2.05% stake in Trent. At today’s close, his notional wealth in Trent fell by over ₹310 crore, from ₹3,513 crore to ₹3,203 crore. - Market Capitalisation Erosion:
Trent’s total market capitalisation dropped by ₹8,000 crore, reflecting the severity of the correction in a single trading day.
Why Did Trent Shares Crash?
- Valuation Concerns:
Trent has been trading at nearly 95 times FY26 estimated earnings, among the most expensive retail stocks in Asia, prompting profit-booking by institutional investors. - Broad Retail Sector Weakness:
Analysts note that the recent consumption slowdown indicators, especially in discretionary segments, have added to market caution on premium retail stocks. - F&O Expiry Impact:
Derivative expiry pressures added to intraday volatility, with aggressive short build-up observed in Trent’s July futures. - Global Market Cues:
Weakness in US and Asian markets amid hawkish Fed commentary and bond yield spikes triggered selling in high-beta counters.
Analyst Target Revisions
| Brokerage | Old Target (₹) | New Target (₹) | Recommendation | Key Commentary |
|---|---|---|---|---|
| Nomura | 5,250 | 4,650 | Neutral | Valuations stretched despite strong brand metrics. |
| Jefferies | 5,500 | 4,800 | Hold | Await margin clarity and SSSG trends post Q1. |
| Kotak | 5,300 | 4,700 | Reduce | Near-term correction healthy but upside capped at current PE. |
| Motilal Oswal | 5,200 | 4,900 | Buy | Long-term structural growth remains intact. |
RK Damani’s Trent Holdings Snapshot
| Period | Holding (shares) | Holding (%) | Market Value (₹ cr) |
|---|---|---|---|
| Dec 2024 | 72,95,000 | 2.05 | 3,128 |
| Mar 2025 | 73,00,000 | 2.05 | 3,513 |
| July 4 Close | 73,00,000 | 2.05 | 3,203 |
Note: Figures rounded off for clarity. Portfolio impact based on closing market prices.
Trent’s Strong Business Momentum Despite Stock Fall
- Q4FY25 Performance:
- Revenue up 52% YoY to ₹3,174 crore.
- Net profit rose 27% YoY to ₹200 crore.
- Same-store sales growth (SSSG) at 22% for Westside.
- Store Expansion Plans:
Management remains confident of adding 30-40 new Westside stores and 150-200 Zudio stores annually to maintain double-digit growth trajectory. - Industry Standing:
Trent continues to command strong investor confidence due to its rapid scale-up strategy, efficient private label model, and supply chain integration advantage.
Retail Sector Valuation Comparison
| Company | CMP (₹) | FY26E P/E (x) | 1-Year Return (%) |
|---|---|---|---|
| Trent | 4,278 | 95 | +98 |
| D-Mart | 4,281 | 78 | +12 |
| Shoppers Stop | 615 | 58 | +35 |
| V-Mart | 2,540 | 65 | +42 |
Broader Market Impact
- Nifty 50 closed 0.85% lower at 23,492, driven by profit booking across largecaps.
- Nifty FMCG and Nifty Consumption indices fell 0.5% and 0.8% respectively, indicating sector-wide caution.
What Should Investors Do?
According to market experts:
- Short-term:
The correction could continue towards ₹4,150-4,200 if market weakness persists, as technical indicators remain in overbought territory despite today’s fall. - Long-term:
Investors with a 2-3 year horizon can use dips to accumulate, given Trent’s solid store rollout strategy, brand moat, and consistent revenue CAGR of 35-40% in recent years. - Risk Factors Ahead:
Slower discretionary demand recovery, margin volatility due to rental cost escalations, and any delay in store expansions remain key monitorables for FY26.
Conclusion
Today’s sharp decline in Trent shares has temporarily dented RK Damani’s portfolio valuation, but analysts remain divided on the near-term trajectory given its high valuation multiples. While business fundamentals remain strong, investors are advised to evaluate their exposure considering sector dynamics, upcoming Q1 results, and broader market volatility before taking fresh positions.
Disclaimer: This news content is for informational purposes only. It does not constitute investment advice or stock recommendations. Investors must consult SEBI-registered advisors before making any market decisions.
