Slow growth rates put skids on Trent stock

The stock of the country's largest apparel retailer by market capitalization, Trent, slid about 12 per cent to close at ₹5,448 per share on worries of a moderation in growth rates and expensive valuations.

- RAM PRASAD SAHU & TANMAY TIWARY

The stock has underperformed the benchmarks over the past year on slowing growth rates and downgrades that have dented investor sentiment. The near-term negative trigger is the lower-than-expected growth print for the June quarter.

In its pre-quarter update, the company reported Q1 standalone revenues at ₹5,061 crore, which translates into a 20 per cent growth over the year-ago quarter. Growth was also lower on a sequential basis. The company's growth trend in the prior three quarters (Q2-Q4FY25) was 40 per cent, 37 per cent and 29 per cent, respectively.

Morgan Stanley Research termed the Q1 show as a big miss and believes that the retail environment continued to be challenging with headwinds from geopolitics, early rains and select sourcing issues.