Trent Q1 Results: Stock up 6% in three sessions ahead of earnings; margins may narrow

Tata Group’s Trent Ltd. will be reporting its June quarter results later today and the stock, ahead of its earnings, has had a three-day gaining streak, during which it has risen 6%.

Trent had already shared its business update for the quarter on July 5, where it mentioned that its standalone revenue for the quarter grew by 20% on a year-on-year basis to ₹5,061 crore.

However, Trent’s historical five year Compounded Annual Growth Rate (CAGR) has been 35%, while the management, at an analyst meet mentioned that a 25% revenue CAGR would be sustainable. The stock, post this statement, had declined 12%. The stock is yet to retest the Pre-July 4 levels.
During the quarter, the company also added one Westside store and 11 Zudio stores.

A CNBC-TV18 poll expects Trent’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to grow by 17% from last year to ₹717 crore. However, margins are likely to narrow by 70 basis points to 14.2% from 14.9% on a year-on-year basis.

Trent’s net profit may decline 6.5% from the year-ago period to ₹365 crore, according to a CNBC-TV18 poll.

Growth outlook and any potential store expansion guidance will be some of the key factors to watch from the management commentary.

Shares of Trent ended 1.3% higher on Tuesday at ₹5,320. The stock is still down 4% in the last one month and 25% on a year-to-date basis. At the current price, Trent trades at 82 times financial year 2027 earnings, despite correcting 36% from its 52-week high.