Shares of Tata Group’s Trent Ltd. continued their decline, falling as much as 3.5% to a day’s low of Rs 6,270 on Friday.
At 11:24 am, Trent’s share price was down 2.69% to Rs 6,323.55 on the Bombay Stock Exchange (BSE). In the previous session, Trent shares fell 8%.
Therefore, the company’s stock has fallen 10% in just two trading sessions.
Trent’s shares began falling on Thursday after the company reported results that slightly missed high market expectations.
For the quarter, Trent’s revenue rose 39% to Rs 4,157 crore, compared to Rs 2,982 crore in the same quarter last year. Net profit stood at Rs 335 crore.
Depreciation expenses for the quarter rose to Rs 197 crore, up from Rs 152 crore in the same period last year, while profit from joint ventures declined to Rs 5.7 crore from Rs 25 crore a year ago. Higher taxes, which increased to Rs 132 crore from Rs 86 crore last year, also weighed on Trent’s profitability.
BUY, SELL OR HOLD?
Brokerage firm Jefferies maintained its “hold” rating on Trent with a price target of Rs 5,900, implying a potential downside of 9.3% from Thursday’s closing price.
Jefferies noted that Trent missed elevated growth estimates despite strong overall growth, and pointed out that the company closed stores in its key fashion segments. Management, however, remains optimistic about future growth opportunities, according to the brokerage.
Vinay Rajani of HDFC Securities commented on the technical trend, saying, “The current setup is weak, and it has breached long-term moving averages. We should avoid anticipating a bottom as the trend remains downward for now. Waiting for consolidation would be advisable.”
Of the 21 analysts covering Trent, 13 have a “buy” rating, while four each hold a “hold” and “sell” rating.
Trent’s shares are trading 3.1% lower on Friday at Rs 6,306, down 25% from their recent high of Rs 8,345.
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