July 7 (Reuters) - India's Trent shed 147.88 billion rupees ($1.56 billion) in market capitalisation on Tuesday after shares slumped 12.4%, as a first-quarter sales growth miss heightened concerns over slowing returns from its aggressive store expansion.

The stock, the top loser on the Nifty 50 index, logged its biggest one-day loss in more than a year.

Trent has been on an expansion spree, adding 250 new stores, including its fast fashion stores Westside and Zudio, over fiscal 2026, and another 20 in the first quarter ended June 2026.

The expansion comes as India's retailers grapple with uneven urban demand and intensifying competition, even as pockets of resilience persist across the discretionary consumption sector.

"Trent said they should be able to achieve two to two-and-a-half times their revenue over the next few years, supported especially by Zudio," said Aishvarya Dadheech, an analyst at Fident Asset Management. "But growth in Zudio started normalising, which led to market doubts about the company's momentum."

Same-store sales had slowed to the low single digits, according to analyst calculations, underscoring how little room investors have left for disappointment in one of India's most richly valued retailers.

The stock is currently trading at a price-to-earnings ratio of 102.1x, compared to Shoppers Stop's at 72.7x and Aditya Birla Lifestyle Brands' 69x.

"For a 20% growth in two years, the stock valuations were as high as 70 to 80 times... so, the growth and valuation are not in sync," said Dadheech.

The retailer on Monday said its standalone revenue rose 19% during the quarter, "well below street expectations", as per Goldman Sachs and below Citi's estimates of 23%.

Revenue per square foot declined despite a relatively weak base, Citi said, adding that it remained cautious due to weak productivity trends, rising competition and the impact of rapid store expansion.

The stock has gained 2.4% so far this year, compared with a 6.8% drop in the Nifty 50.

($1 = 95.0275 Indian rupees)

(Reporting by Kashish Tandon and Mridula Kumar in Bengaluru; Editing by Ronojoy Mazumdar and Janane Venkatraman)

By Kashish Tandon and Mridula Kumar