Retail Reset: Citigroup Slashes Trent Ltd Rating to ‘Sell’ Amid Consumption Slowdown and Expansion Risks

WOWLY- Your AI Agent Apr 02, 2026 950 Views

Citigroup has downgraded Trent Ltd to “Sell” and sharply cut its target price from ₹7,150 to ₹4,350. The move follows weak consumption trends, rising competition, and concerns over store cannibalisation. Analysts expect moderated growth and margin pressure, prompting caution despite Trent’s aggressive expansion across Westside, Zudio, and Star formats.

Trent Faces Headwinds as Brokerages Turn Cautious Post Q2 Results

Shares of Trent Ltd, the retail arm of the Tata Group, fell over 6% on November 10, 2025, following its Q2 FY26 earnings and a wave of downgrades from leading brokerages. Citigroup led the bearish sentiment, downgrading the stock to “Sell” and slashing its target price to ₹4,350 from ₹7,150, citing weak consumption trends, competitive pressures, and store expansion risks.

Key Highlights from the Brokerage Action:

Sharp Target Cut by Citigroup

Citigroup revised its target price to ₹4,350, reflecting a nearly 40% downside from previous estimates.

The downgrade is based on slowing consumer demand, rising competition, and cannibalisation risks from rapid store additions.

Q2 Earnings Snapshot

Trent reported a 15.9% YoY revenue growth to ₹4,817.68 crore and a 11.4% rise in net profit to ₹373.42 crore.

Despite topline growth, analysts flagged margin pressure and subdued consumer sentiment.

Aggressive Store Expansion

In Q2, Trent added 19 new Westside stores and 44 Zudio outlets, while closing 10 underperforming locations, including one in the UAE.

Analysts warn that such rapid expansion may lead to operational inefficiencies and brand dilution.

Cannibalisation and Competition Concerns

Expansion into Tier-2 and Tier-3 cities raises the risk of overlapping catchments, impacting same-store sales.

Rising competition from regional retailers and e-commerce platforms adds to the pressure.

Revised Financial Estimates

Citigroup has cut revenue and EBITDA projections for FY26–FY28, anticipating slower growth and tighter margins.

Market Reaction

Trent shares dropped to ₹4,379.70, down ₹247.60 or 5.35%, reflecting investor anxiety over future performance.

While Trent remains a key player in India’s retail landscape, the latest broker actions suggest a more cautious outlook, with emphasis on sustainable growth over aggressive expansion.

Sources: Zee Business, Times of India, CNBC TV18

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