Tata Group-owned Trent, which was Nifty’s top-performing stock in 2024 with a remarkable 133 per cent return, has hit a rough patch in 2025. The fast-fashion giant has seen its share price drop 19 per cent this month, erasing Rs 47,000 crore in market value. Compared to its October peak of Rs 8,345.85, the stock is now down by 31 per cent. Analysts have identified six key reasons behind Trent’s downturn.
1. Moderating Growth Profile
Trent, which had consistently posted over 50 per cent revenue growth since Q4 FY21, reported a 40 per cent year-on-year (YoY) revenue growth in Q4 FY24—impressive but below market expectations. Analysts attribute this to muted consumer sentiment, seasonality, and the closure of 25 stores (16 Zudio and 9 Westside). Jefferies noted that Westside experienced a net decline of two stores, exiting five cities in the second consecutive quarter of contraction.
2. Earnings Challenges
Trent is scheduled to announce its Q3 FY25 results on 6th February. Ahead of this, Kotak Institutional Equities downgraded the stock to “sell,” setting a target price of Rs 5,850. While Nuvama expects 40 per cent YoY revenue growth, it anticipates a moderation in gross margins by 50 basis points YoY, raising concerns about profitability.
3. Valuation Pressure
At its peak, Trent traded at an elevated price-to-earnings (PE) ratio of 133.7x its estimated FY25 earnings. Kotak noted that with a moderating growth profile, the high valuation is difficult to justify, making it an opportune time for investors to book profits. The market has been particularly harsh on high-PE stocks with diminishing growth outlooks.
4. Consumption Slowdown
India is currently experiencing a slowdown in discretionary spending, which is expected to impact Trent’s hyper-growth trajectory. Analysts believe a subdued macroeconomic environment is weighing on consumer sentiment, particularly in the retail sector.
5. Overcrowding of Stores
Kotak’s analysis revealed instances of Zudio stores overlapping within the same pin code, potentially leading to revenue cannibalisation. While Zudio’s store additions remain strong, this expansion strategy could flatten revenue throughput, raising questions about long-term sustainability.
6. Intensifying Competition
Trent faces growing competition from established players and emerging direct-to-consumer (D2C) brands in the fast-fashion segment. The success of Zudio has spurred multiple entrants, such as Yousta, StyleUp, and InTune, into value retailing. Additionally, quick-commerce players are challenging Star Bazaar’s grocery segment.
What Lies Ahead?
Despite the current headwinds, analysts remain optimistic about Trent’s long-term potential. Elara Securities initiated coverage on the stock with a target price of Rs 8,500, citing Zudio’s dominance in the fast-fashion market.
“The concerns are overdone. Trent has a solid proposition. Zudio continues to perform exceptionally well and has established a moat with profitability, styling, and consistent inventory upgrades,” said Karan Taurani of Elara according to a report.
Goldman Sachs also highlighted Zudio’s potential, forecasting market share growth of 1 per cent to 5 per cent by FY35, with a compound annual growth rate (CAGR) of 27 per cent in sales. Zudio’s growth will mostly come from gaining market share from unorganised players. Although Trent’s near-term growth appears moderate, strategic positioning in high-growth segments such as fast fashion and valuable retail, can help them gain momentum in the long run.

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