What: Trent Limited's stock plunges 11% following lower-than-expected Q1 growth guidance of 20%, prompting investor concerns about the company's growth trajectory.

Why it is important: The guidance revision reflects broader challenges in India's retail sector, where even market leaders must balance aggressive growth expectations with market realities, as evidenced by recent retail performance metrics showing varied regional growth patterns.

Trent shares experienced their most significant single-day decline since April, plummeting 11.8% after management tempered first-quarter growth expectations. The company's projection of 20% revenue growth fell notably short of earlier forecasts, triggering substantial profit-taking by investors. This adjustment particularly impacted market sentiment given Trent's impressive track record, having delivered a 785.7% return over five years and emerging as the top Nifty performer in 2024 with a 133.2% gain. The stock's reaction was amplified by its premium valuation, with analysts noting that high price-earnings multiple companies face heightened scrutiny when revising growth estimates downward. Brokerage Nuvama responded by downgrading Trent to 'hold' and reducing its target price, citing concerns about growth trajectory given the company's historical performance of approximately 35% CAGR over FY20-25. Analysts advise caution until greater clarity emerges regarding the company's growth path and earnings visibility.

IADS Notes: As observed in April 2025, India's retail sector showed mixed signals, with overall retail sales growing 4% year-on-year with significant regional variations. This comes against the backdrop of India's e-retail market reaching $60 billion in April 2025, becoming the world's second-largest online shopper base. The contrast between Trent's guidance and broader market indicators, including a 55% surge in retail leasing across top cities in April 2025, suggests a complex landscape where traditional growth metrics are being reassessed. This follows patterns seen in January 2025, when other retailers like Shoppers Stop demonstrated strong performance with 41.7% profit growth, highlighting the varying fortunes of different retail players in India's evolving market.

Trent guides for slowdown Q1 earnings, stock slumps 11%