Shares of Tata Group’s Trent Ltd fall as much as 12% after Q1 business update. The brokerage advised caution if revenue growth was lower than expected.
Trent Stock Crash Reason: There may be a rise in the stock market on Tuesday, July 7, but heavy selling is being seen in the shares of Tata Group’s retail company Trent. After the company’s June quarter (Q1) results, investors made huge sales in this stock, due to which the stock fell by more than 10 percent in early trade. At present the stock is trading with a decline of about 12 percent.
Trent Share Price Today: How much did the share fall?
Shares of Trent Limited opened at Rs 3,111 in the morning on BSE. As soon as the trading started, there was sharp selling and at one time the share reached a low of Rs 2,938. Even after this, the pressure continued and the stock was seen trading with a decline of more than 12 percent around Rs 2,941.
What is the reason for the fall in Trent’s shares?
- Brokerage firms believe that the company’s June quarter business update did not meet market expectations. In particular, revenue growth was weaker than expected, which affected investor confidence.
- Additionally, the pace of new store openings was slower than expected, even in a quarter where store expansion is typically low. The market was expecting more than 20 percent revenue growth from the company, but the figures were less than that. This is the reason why sharp selling was seen in the shares.
Trent Q1 Business Update: How was the performance in the June quarter?
Trent Ltd reported standalone revenue of Rs 5,666 crore in the June quarter. This figure was Rs 4,781 crore in the same quarter last year. The company had a total of 1,312 stores at the end of the quarter. These include 301 Westside stores, 982 Zudio stores and 29 other lifestyle format stores.
Trent Share Target Price: What is the opinion of brokerage?
After the June quarter update, different brokerage houses have given their opinion on Trent.
- Bernstein has given a target price of Rs 3,500 while maintaining ‘Outperform’ rating on the stock.
- Morgan Stanley has maintained ‘Overweight’ rating and set a target of Rs 3,151.
- Reiterating ‘Sell’ rating, Citi has given a target price of Rs 2,733. The brokerage said standalone revenue growth was lower than expected and revenue per square foot declined 12.2 per cent year-on-year.
What are the signals for investors?
The sharp fall in Trent Limited shares after the June quarter business update shows that the market was expecting better performance from the company. Now investors will focus on the company’s revenue growth, new store expansion and improvement in profits in the coming quarters.