Trent shares tumble 10% in two days as Q3 revenue growth falls below expectations

Shares of Trent Ltd experienced a significant fall for the second consecutive session on Wednesday, January 7, with the stock falling 10% over two days. The share price reached an intraday low of Rs 3,988, close to its 52-week low of Rs 3,931.

Later, the stock closed 0.36% higher at Rs 4062. This comes as the company’s latest quarterly update disappointed investors, showing revenue growth that came below expectations. The company in its third quarter business update reported a revenue growth of 17%, below the management guidance of 25% which it had shared in an earlier analyst meet.

The recent performance has prompted mixed responses from analysts. While Citi has reiterated its 'sell' rating on the stock with a price target of  Rs 4,350, Morgan Stanley has maintained a positive stance.

Morgan Stanley maintained its 'overweight' rating on Trent with a price target of Rs 5,456, stating that the Q3 growth was largely in-line with their expectations, although lower than the third and fourth quarter of financial year 2025 and the first quarter of financial year 2026.

The current price-to-earnings multiple for the financial year 2027 stands at 72 times, down from a five-year average of 95 times and significantly lower than the peak multiple of 140 times. 

Trent’s trading volume has reflected the market’s concern, with the stock now below all major analyst targets. The company’s PEG ratio has increased to 4 from 2.5 at peak, coinciding with a slowdown in three-year sales CAGR from 55% to 18%. As Trent operates in a competitive sector, these developments place it behind its growth trajectory and underline the market’s cautious approach in the wake of softer quarterly performance.