Trent Shares Dip as Kotak Lowers Estimates, Competition Concerns Rise

shares experienced a decline of over 2.8% as Kotak Institutional Equities revised its estimates, citing potential revenue pressure. This drop comes amid heightened market volatility and concerns over increased competition, particularly with Reliance Retail's reported relaunch of Shein in India, which could impact Trent's Zudio and Westside brands. Despite reporting a robust 34% year-on-year increase in both net profit (Rs 496.54 crore) and revenue (Rs 4,656.56 crore) for Q3FY25, Trent's revenue growth has shown signs of moderation, attributed to store consolidation and subdued consumer demand. However, analysts acknowledge that Trent's growth remains industry-leading. The company's gross margin saw a 124 basis point compression to 44.7%, which Trent attributes to product mix rather than promotional discounts. While Trent opened 82 new stores and closed 6, analysts suggest that future store upgrades and consolidations may limit net store growth. The stock, once a market favorite, has faced significant headwinds, with a 32% year-to-date loss. The revised estimates and competitive pressures have contributed to the recent market downturn for Trent.