Trent Ltd. Faces Sharp 7% Drop Amid Volatile Trading; Analysts Advise Caution

Trent Ltd. saw a 7% drop in stock price on February 4, 2025, amid volatility and concerns over weak consumer sentiment and seasonal challenges. Despite a 34% correction from its record high in October 2024, analysts have mixed views, with some recommending caution due to margin pressure and weak store expansions. Others remain optimistic about the company’s long-term growth prospects, particularly for its key brands.

CONTENTS:

• Trent Ltd. Faces Sharp 7% Drop Amid Volatile Trading: Investors Remain Cautious
• Trent Ltd. Faces 34% Drop from Record High Amid Mixed Analyst Views
• Nine stocks from the NSE large cap pack

Trent Ltd. Faces Sharp 7% Drop Amid Volatile Trading; Analysts Advise Caution

Trent Ltd. Faces Sharp 7% Drop Amid Volatile Trading: Investors Remain Cautious

Trent Ltd. Faces Sharp 7% Drop Amid Volatile Trading Trent Ltd., a leading player in India’s retail sector, experienced a sharp 7% drop in its stock price on February 4, 2025. The stock opened at ₹6,169.95, peaked at ₹6,190.00, but fell drastically to ₹5,653.45 before closing near its lower circuit limit at ₹5,521.60. This significant decline has raised concerns among investors.

Over the past month, Trent’s stock has shown considerable volatility. On January 24, 2025, it fell by 4.21%, underperforming its sector by 3.25%, and saw a similar 3.93% drop on January 8, 2025, marking an 8.11% decline over four consecutive days. Despite these fluctuations, Trent’s stock remains above its 200-day moving average but below shorter-term averages.

In November 2024, despite reporting a 47% increase in Q2 net profit, Trent’s share price dropped by 8%, attributed to results falling slightly short of market expectations and external factors like weak consumer sentiment and seasonality in the retail sector.

Technical analysis shows the stock trading below its 5-day, 20-day, 50-day, and 100-day moving averages, signaling a bearish short-term trend. The Relative Strength Index (RSI) has also declined, indicating possible oversold conditions. The breach of key support levels has raised concerns among traders about the stock’s near-term performance.

Analysts have mixed views on Trent’s stock. Some have downgraded their recommendations from ‘Buy’ to ‘Hold’, citing recent volatility and external challenges in the retail sector, while others remain optimistic about the company’s long-term growth. Investors are advised to stay cautious and monitor upcoming earnings and sector developments before making investment decisions.

Trent Ltd. Faces 34% Drop from Record High Amid Mixed Analyst Views

Trent Ltd. Faces Sharp 7% Drop Amid Volatile Trading  Trent Ltd., the retail arm of Tata Group, has seen a significant correction in its stock price, down 34.63% from its record high of ₹8,345.85 on October 14, 2024. Despite its strong long-term performance, with the stock delivering returns of 363%, 435%, and 824% over the past two, three, and five years, respectively, the stock is now considered oversold, with its Relative Strength Index (RSI) at 26.3, indicating more selling pressure than buying.

In January 2025, the stock corrected by 23%, and its moving averages have turned negative, with the stock trading below several key averages, including the 5-day, 10-day, and 200-day moving averages. This indicates a bearish short-term trend. As of the latest session, the stock traded at ₹5,446, with a market capitalization of ₹1.94 lakh crore.

Despite this, analysts have differing opinions. Axis Securities maintains a “Buy” call with a target price of ₹6,050 for a 6 to 9-month duration, citing Trent’s strong Q2FY25 performance, growth in its key brands like Zudio, and the company’s expansion strategy. They expect strong results to continue, particularly in the upcoming festive season.

However, brokerages like HDFC Securities and Kotak Equities have a more cautious stance, with HDFC Securities maintaining a “Sell” call and target price of ₹4,160, due to concerns over margin pressure and underperformance in store expansions. Kotak Equities has downgraded Trent to “Sell” from “Add,” citing that the stock’s strong growth has already been priced in and pointing to disappointment in store additions.

On the other hand, Goldman Sachs remains optimistic with a “Buy” call and a target price of ₹8,000, projecting strong growth for Zudio and steady performance from Westside. They also expect Trent’s Fashion & Lifestyle business to maintain sustainable margins as Zudio stores mature.

Overall, while some analysts see potential in Trent’s long-term growth, others suggest the stock may be overpriced at its current levels, advising caution for short-term investors.

Nine stocks from the NSE large cap pack that showed an upward trend in the RSI (Relative Strength Index) as of February 1, 2025:

1. Godrej Consumer Products: RSI increased from 44.06 to 62.69, current price: Rs 1,191.7.
2. ITC: RSI moved from 49.74 to 60.45, current price: Rs 462.55.
3. Havells India: RSI rose from 48.95 to 57.62, current price: Rs 1,280.15.
4. Macrotech Developers: RSI increased from 48.95 to 57.62, current price: Rs 1,280.15.
5. Pidilite Industries: RSI moved from 47.99 to 56.07, current price: Rs 2,947.25.
6. United Spirits: RSI increased from 40.78 to 52.28, current price: Rs 1,498.1.
7. Indus Towers: RSI rose from 49.04 to 52.27, current price: Rs 352.8.
8. Hyundai Motor India: RSI moved from 40.62 to 51.7, current price: Rs 1,750.45.
9. Trent: RSI increased from 39.09 to 50.97, current price: Rs 6,189.5.

Trent Ltd. Faces Sharp 7% Drop Amid Volatile Trading  An RSI value above 50 suggests a strengthening momentum in the stock, potentially indicating buying opportunities.