Trent's worst over after Rs 1.6 lakh crore shock? Why brokerages aren't convinced yet

The retail sector, especially apparel, faces challenges with rapid expansion leading to cannibalization and cost pressures. Investor sentiment is cautious on companies prioritizing aggressive growth over sustainable profitability.

Maintain a cautious stance on retail stocks with aggressive expansion plans; look for companies demonstrating efficient store management and healthy same-store sales growth.

For Indian markets, this story mainly matters for TRENT and the Retail, Apparel pocket. The current signal is bearish, so traders should look for follow-through in price, volume, and sector breadth instead of reacting to the headline alone.

Watch whether the next market session confirms the setup described here: Stock plummeted over 50% from peak, brokerages express caution due to over-densification, sales pressure, cannibalization, and rising input costs. Also track volume confirmation, sector participation, and whether the move holds beyond the first reaction.

• •Trent's stock has plummeted over 50% from its peak, erasing Rs 1.6 lakh crore in wealth.
• •The primary reason cited is store network over-densification, especially with Zudio.
• •Brokerages like Goldman Sachs and Citi express caution.
• •Concerns include sales pressure, potential cannibalization, and rising input costs.
• •This caution persists despite recent revenue growth.