Due to decreased disposable incomes and a high base from the same quarter last year, the garment sector continues to see weak demand during the January–March quarter. Brokers reported that fewer weddings in January and February resulted in a tame demand.
Retail enterprises in the garment industry are anticipated to record an aggregate sales gain of 21 per cent for the coverage, according to IIFL Securities. It anticipates 11 per cent growth, excluding Trent.
“March performance was much better than the previous months, driven by festival demand,” Phillip Capital said in its report on the sector.
It also mentioned that during the January–March quarter, discounting was comparatively lower. Furthermore, given the emergence of green shoots in Tier-2 and 3 sectors, consumption may rise in the first quarter of FY ’25.
The pent-up demand from last year (on a high base) and reduced disposable incomes, according to Emkay’s analysis, are the reasons why fashion, clothing, and innerwear trends are still poor.
“We expect single-digit growth for Page Industries/Aditya Birla Fashion and Retail (core business). GOCOLORS is likely to outperform with mid-teen growth,” Emkay said in its report.
In its analysis, Motilal Oswal stated that it anticipates Page Industries’ revenue to increase by 9.8 per cent year over year due to base impact and seasonality. During the quarter, a 150 basis point (bps)/430 bps year-over-year improvement in gross margin and earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin growth is anticipated.
IIFL anticipates Trent to report a 51 per cent rise in sales, mostly due to the opening of new stores and the growth in Zudio’s sales per square foot.
It also added, “At the end of the quarter, Westside and Zudio store count stood at 225 and 518 — implying 11 and 166 store additions, respectively, for FY ’24. It is possible that some of these include converting smaller Westside stores in Zudio.”
The brokerage added that V-Mart now has 444 stores after closing 10 locations throughout the quarter. It feels that the shop should gain from a longer winter. It did point out, though, that core V-Mart same-store sales moderated from 5 per cent from October to December to 4 per cent from January to March.
