Shares of Trent—Tata’s retail arm saw a decline of 7.5% in today’s trade, hitting a low of Rs 4,262.60. Trent declared its Q2 results for the current financial year on Friday, where its shares already declined by a per cent, showcasing ambiguous investor sentiment.

The company reported a growth of 16% on a year-on-year (YoY) basis in its revenue from operations, and a rise of 11.44% in its consolidated net profit to Rs 373.42 crore. The company also recorded a 20% rise in standalone revenue from sale of products, to Rs 5,061 crore from last year’s Rs 4,228 crore.

Then what is causing the stock price of Trent to fall?

Trent’s food and grocery business, Star, saw a flat growth in revenue, reporting only Rs 869 crore in the quarter under review, as it'slike-for-like growth also remained flat. Star’s own brand share rose by 100 bps, from 72% to 73%.

As per a report by Motilal Oswal Financial Services (MOFSL), Star business continued to underperform as revenue declined 2% YoY (vs. 7% YoY growth in 1Q) as multiple stores underwent upgrades during the second quarter. Store count remained stable at 77, but revenue per square feet declined 14% YoY to Rs 26,900.

Meanwhile, Zudio, the affordable fashion brand saw 10 stores consolidate, while 11 stores opened as of June 30,2025, thereby indicating a flat trend as well.

Trent’s revenue growth continued to decelerate in 2QFY26 (+17% YoY), as nearly 43% YoY area addition growth was offset by sharp 17% YoY decline in revenue per square foot, indicating store-level sales cannibalisation.

As per the company’s commentary, consumer sentiment in Q2 was relatively muted and was further affected by unseasonal rains. With GST rationalisation, customers initially prioritised purchases of big-ticket products with greater GST cut benefits. “Management expects demand traction to pick up over the medium term for discretionary lifestyle categories as well. Emerging categories, including beauty and personal care, innerwear, and footwear, contributed to 21% of standalone revenue, while online revenue grew 56% YoY, contributing 6%+ of Westside sales.”

MOFSL stated, “We continue to like Trent for its robust footprint additions, strong double-digit growth, long runway for growth in Star (presence in just 10 cities), and potential scale-up of emerging categories (Beauty, Innerwear, Footwear, and LGDs). However, revenue growth acceleration remains a key trigger.”

At the time of reporting, Trent's shares were trading at Rs 4,282.50, down by 7.45% from yesterday's closing.