Trent Q2FY26 Results: Profit Up 11%, Growth Slows

Tata Group's retail powerhouse, Trent Ltd, reported a mixed set of results for the second quarter of fiscal year 2026. While the company posted a healthy 11% year-on-year (YoY) rise in consolidated net profit to Rs. 373 crore, its revenue growth showed signs of deceleration, causing the stock to tumble nearly 7% in the following sessions. Adding to the news, the company announced a significant strategic shift, revealing its plan to reduce its stake in its joint venture with Inditex, which operates Zara stores in India. This combination of slowing momentum and a major corporate restructuring has left investors trying to decipher the future trajectory of the fast-fashion retailer.​

Table of Contents

1. Financial Performance: Growth Continues, But Pace Moderates
2. Zudio's Aggressive Expansion Fuels Growth
3. The Zara Joint Venture: A Major Strategic Shift
4. Why Did Trent's Stock Fall Despite Profit Growth?
5. The Final Word for Investors
6. Frequently Asked Questions (FAQs)

Financial Performance: Growth Continues, But Pace Moderates

For the quarter ending 30 September 2025, Trent's revenue from operations grew by a steady 15-16% YoY to Rs. 4,818 crore. While this double-digit growth is impressive, it represents a slowdown from the high-growth trajectory of previous quarters, raising concerns about the impact of muted consumer sentiment. The company attributed the challenging quarter to "relatively muted" consumer sentiment and headwinds from an unseasonal monsoon. Despite this, Trent demonstrated strong operational control, with EBITDA margins remaining stable at around 16.7%.​

Key Financial Highlights for Q2 FY26

For a deeper look at Trent Ltd share price trends, financial ratios, and valuation metrics, visit the detailed company page on Ticker by Finology.

Zudio's Aggressive Expansion Fuels Growth

Trent's revenue growth was primarily driven by the aggressive expansion of its value-fashion format, Zudio, which continues to be the company's main growth engine.

• Zudio: The company opened 40 new Zudio stores during the quarter, bringing the total to 806. This rapid expansion is the primary driver of Trent's top-line growth.

• Westside: The flagship apparel and lifestyle chain also expanded its presence, adding 13 new stores to reach a total of 261, contributing significantly to the standalone revenue.

The Zara Joint Venture: A Major Strategic Shift

The most significant news alongside the results was Trent's decision to trim its stake in Inditex Trent Retail India (ITRIPL), the joint venture that operates Zara stores in the country.

• The Transaction: Trent's board approved a proposal to sell a portion of its stake in the JV to its Spanish partner, Inditex, as part of a share buyback plan. The deal is valued at around Rs. 1,463 crore.​

• Shifting Shareholding: This move will see Inditex's stake in the JV increase, while Trent's holding will be reduced. This is a strategic monetisation for Trent, allowing it to cash in on a successful investment, while for Inditex, it signifies a move to consolidate control in the strategically important Indian market.​

You can also revisit Trent Q1 FY26 result to understand how Zudio’s earlier expansion set the foundation for this quarter’s growth.

Why Did Trent's Stock Fall Despite Profit Growth?

Despite posting profit growth, the market reacted negatively, sending the stock to a 52-week low. The key reasons for this are:

• Growth Deceleration: The 15-16% revenue growth, while healthy, is a step down from the high-growth trajectory that investors have come to expect from Trent, raising concerns about its ability to sustain its premium valuation.​

• Weak Like-for-Like (LFL) Sales: The muted consumer environment has led to weak LFL sales growth from existing stores. This means that most of the top-line growth is currently being driven by new store openings rather than increased sales from mature stores.

• Brokerage Downgrades: The slowing momentum led some brokerages, like Jefferies, to lower their target price on the stock, which further dampened investor sentiment.​

For a visual perspective on what’s driving Trent’s recent stock correction, watch this insightful analysis by Groww on YouTube.

The Final Word for Investors

Trent's Q2 results signal a company navigating a tough consumer market. While its aggressive expansion continues to fuel top-line growth, the underlying demand appears soft. The decision to sell down its stake in the Zara JV is a smart financial move, unlocking capital that can be reinvested into its core, high-growth formats. The key question for investors is whether this slowdown is a temporary blip or the beginning of a new, more moderate growth phase.

Frequently Asked Questions (FAQs)

1. What was Trent's net profit and revenue in Q2 FY26?
Trent reported a consolidated net profit of Rs. 373 crore (up 11% YoY) and revenue from operations of Rs. 4,818 crore (up 15-16% YoY).​

2. Why did Trent's stock price fall after the results?
The stock fell due to concerns over slowing revenue growth and weak like-for-like sales, which suggested that the company's high-growth momentum might be moderating.​

3. What is happening with Trent's Zara joint venture?
Trent is reducing its stake in the joint venture that operates Zara stores in India by selling a portion of its shares back to its partner, Inditex, for approximately Rs. 1,463 crore.​

4. Which brand is driving Trent's growth?
The value-fashion format, Zudio, is the main growth engine, with the company aggressively opening 40 new stores in the quarter.

5. What is the outlook for Trent?
While the long-term growth story remains intact due to its strong brands and retail footprint, the near-term challenges of muted consumer sentiment and the stock's high valuation warrant a degree of caution. The upcoming festive season will be crucial in determining the company's growth trajectory.