This 'dhurandhar' was not only Ratan Tata's favorite but the entire country's favorite, his back broke in 2025

Shares of Trent, the Tata Group's retail giant that owns the budget fashion chain Zudio and the premium brand Westside, are heading for an embarrassing fall. 

Trent's stock has become the worst performing Nifty 2025 stock. This once-proud multi-bagger stock has fallen 43% this year, eroding its market cap by more than ₹1 lakh crore. The company's valuation has fallen to ₹1.45 lakh crore.

This massive sell-off marks a stunning reversal for a stock that was once a favorite of retail and institutional investors. Tata Group companies now lead the three biggest share declines this year. 

Shares of Tata Motors, the passenger vehicle company, are down 22 percent, while shares of the country's largest IT company, TCS, have already fallen 21 percent.

The biggest reason for the company's stock crash is its aggressive store openings, which are hurting existing stores. Declining consumption is impacting urban demand. Furthermore, competition is steadily increasing, threatening Judio's dominance in fashion retail.

The increase in stores gave a shock

Bernstein analyst Jignanshu Gor, in an ET report, says that excessive concentration of the store network is a key reason for the decline in sales growth, highlighting a critical flaw in Trent's expansion strategy. 

Since March 2024, Zoodio has aggressively added 285 net stores, expanding its network from 539 to 824 outlets. But this growth has come at a cost: 58% of existing stores now face competition from a new Zoodio located in the same city.

At the pincode level, 11% of stores are now competing with sister outlets for the same customers—a strategic mistake that is only beginning to reverse in FY2026, with only 3% of the network facing same-pin overlap.

Decrease in consumption

Dalal Street veteran Saurabh Mukherjea, whose PMS firm Marcellus holds a significant stake in Trent, also acknowledges the difficult situation. He said in an ET report that the slowdown in consumption is affecting everyone, including Trent. 

However, he said the company has maintained better same-store sales growth than rivals like Reliance Retail and Aditya Birla Fashion Retail. 

He added, "With a large stake in Trent, we are in a very comfortable position and are betting on continued fiscal stimulus until 2026 to revive consumption demand."

Judeo's dominance is under threat

According to Bernstein, the budget fashion chain, which drove Trent's growth by capturing share from unorganized players, still holds strong brand appeal, with strong Google search interest and social media engagement. 

But new entrants, Eusta, Style Union, OWND and Intune, have collectively opened 358 stores, with postcode overlap affecting 27% of Judio's network.

Goldman Sachs estimates that Zoodio's market share will grow from its current 1.5% to 5% in the long term, arguing that most competitors "have not yet established strong store economics" and that Zoodio's costs—no advertising, minimal discounting, and twice the sales of competitors—create a strong moat. Goldman Sachs says it took Zoodio more than five years to optimize its model before explosive growth began.

How was the performance in the second quarter?

Recent financial data is showing mixed signals. In Q2 FY26, Trent's revenue grew 15.9% year-on-year (YoY) to ₹4,818 crore, with combined Westside and Zoodio revenue growing 20.9% to ₹3,939 crore. 

EBITDA grew 26.5% to ₹817 crore, while margins expanded 150 basis points to 17%, reflecting strong operations and cost discipline. PAT increased 11.4% to ₹373 crore. However, the food and grocery segment declined 2.1% to ₹879 crore due to store upgrades and stiff pricing competition.

Bernstein believes Trent's revenue growth is currently at a low ebb. CAGR is projected at 19% in FY2026 and 20% by FY2028, driven by improved store-to-store sales, continued network expansion, and improved consumer demand. 

However, margins are "at their peak," and further growth is expected to be modest. Management is formulating a long-term strategy. Analysts say the company is considering options that will benefit its brands in the long term, even if they result in short-term losses.