Rs 17,540 crore added to Trent mcap, but Citi stays bearish. Why Morgan Stanley disagrees

Trent shares soared around 13% on Tuesday, adding more than Rs 17,540 crore to its market capitalisation within an hour of the opening bell after the Tata Group company released its Q2 business update. While Morgan Stanley, Motilal Oswal and a few other brokerages remain bullish on the stock, Citi remains cautious.

Shares of Tata Group’s retail arm jumped to Rs 2,909 apiece on NSE on Tuesday morning. The stock is on track to record its sharpest single-day gain in more than two years, taking its market capitalisation beyond the Rs 1.5 lakh crore mark.

Also read | Trent shares rally after Q2 revenue rises 23% YoY to Rs 4,724 crore

Trent Q2 business update

Trent on Monday reported a 23% year-on-year rise in standalone revenue from operations to Rs 5,788 crore in the April-September period of FY27, up from Rs 4,724 crore a year earlier. Revenue for the first half of FY27 increased 21% YoY to Rs 11,454 crore from Rs 9,505 crore in the year-ago period.

During the quarter, Trent opened its 1,000th Zudio store, marking a key milestone for the fashion and lifestyle retailer. It added 10 Westside stores and 17 Zudio stores on a net basis. As of September 30, 2026, Trent’s portfolio stood at 1,342 stores across Westside, Zudio and other lifestyle brands, as per the exchange filing.

Also read | Trent’s Q2 revenue rises 23% YoY to Rs 5,788 crore; Zudio crosses 1,000-store milestone

Morgan Stanley on Trent share price

Morgan Stanley has an ‘Overweight’ call on Trent shares with a target price of Rs 3,406 apiece, implying over 32% upside potential from the stock’s previous closing price of Rs 2,580 apiece. The international brokerage noted that the company’s Q2 numbers strongly beat estimates.

Revenue growth accelerated to 23% from 16-20% in the past five quarters. Better-than-expected revenue growth, especially in the context of the shift in the festive calendar, should be viewed positively, according to Morgan Stanley. It, however, views margins as a key factor to monitor.

HSBC on Trent share price

HSBC has a ‘Buy’ rating on Trent shares with a target price of Rs 3,390 apiece, implying over 31% upside potential. The international brokerage noted that 23% YoY revenue growth was higher than its estimate of a 19% rise and the consensus estimate of 18% growth.

Motilal Oswal also reiterated its ‘Buy’ call on Trent shares, highlighting the strong revenue print.

Citi on Trent share price

Citi, however, has a ‘Sell’ call on Trent shares with a target price of Rs 2,950 apiece, implying over 14% upside potential. The international brokerage noted that the company’s 23% revenue growth beat its estimate of an 18% rise, despite lower-than-expected store expansion and an unfavourable festive-calendar shift from Q2 to Q3.

Average revenue per square foot (assuming the same new-store size as TTM) declined 8% YoY, lower than Citi’s expectations of a 12% decline. In the first half of FY27, Trent has added 56 net stores. Sustained improvement in revenue per sq ft trend bundled with store expansion can drive further re-rating, the brokerage said.

Citi remains cautious on Trent given a still-weak revenue per sq ft trend, increasing competition, impact of cannibalisation, and risk to margins from input cost inflation.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.