Trident Q1 results up 6%, India-UK FTA lifts shares; what to do next?

Trident's Q1FY26 net profit surged 89% to ₹140 crore, up 6% on the back of a healthy earnings report and the India-UK free trade agreement. The stock was trading at ₹33.28, up 5.55% on the National Stock Exchange. Analysts believe the stock is currently trading at premium valuations, with most positives already priced in, and existing investors can consider holding the stock at current levels while new investors can look to accumulate gradually.

Trident, a textile fabric manufacturer, reported a significant surge in its net profit for the first quarter of the financial year 2025-2026 (Q1FY26), with a 89% increase to ₹140 crore. The company's stock price also saw a notable increase, trading at ₹33.28, up by 5.55% on the National Stock Exchange. Analysts attribute this positive performance to both strong earnings and the recent India-UK free trade agreement (FTA).

The India-UK FTA, signed during Indian Prime Minister Narendra Modi’s visit to London, aims to elevate bilateral trade by up to £25.5 billion annually by 2040. Under the agreement, 90% of UK exports to India will face reduced tariffs, with 85% becoming fully tariff-free, while Indian exports to the UK will see similar benefits [1][2]. The deal is expected to add nearly £5 billion ($6.8 billion) to the UK economy annually, with potential wage increases and broader economic stimulus anticipated [4].

Analysts note that sectors like textiles, leather, food processing, automobiles, pharmaceuticals, and gems and jewelry are likely to benefit from the FTA. VK Vijayakumar, chief investment strategist of Geojit Investments, stated, "Sectors like textiles, leather, food processing, automobiles, pharmaceuticals and gems and jewellery, which are expected to benefit from the FTA, will be on the market radar" [2].

Trident's earnings report also highlighted a slight decline in revenue from operations, down 2% to ₹1,706.8 crore in Q1FY26 from ₹1,742.7 crore in the first quarter of the last financial year. However, this decline was offset by a drop in total expenses, which fell to ₹1,539.16 crore from ₹1,655.59 crore reported in Q1FY25 [2].

The company's stock performance reflects investor optimism, with analysts suggesting that existing investors can consider holding the stock at current levels while new investors can look to accumulate gradually. Kranthi Bathini, equity strategist at WealthMills Securities, stated, "While the India-UK trade deal contributed to Trident’s recent rally, keeping in view the prospective export-driven benefits, strong Q1 results further fueled investor optimism. Existing investors can consider holding the stock at current levels, while new investors can look to accumulate gradually" [2].

Technically, the stock is trading above its key moving averages of 20-day and 50-day EMAs, reaffirming the strength and persistence of the bullish trend in the near term [2].

References:
[1] https://www.ainvest.com/news/uk-india-ink-landmark-free-trade-pact-boost-trade-25-5-billion-annually-2040-2507/
[2] https://www.business-standard.com/markets/news/trident-up-6-on-q1-results-india-uk-fta-lifts-mood-what-should-you-do-125072500306_1.html