Apparel retail stocks in focus on recovery gains led by easing of curbs

Double-digit growth and improving profitability to drive earnings in FY23

Led by Trent, which hit its lifetime-highs recently, apparel retailers gained between 10-36 per cent over the last three weeks. Given the network of physical stores, the stocks will be major beneficiaries of the unlock theme with most states doing aways with restrictions. With improving footfalls, analysts expect the sector to post double-digit growth in FY23.

This coupled improving margins on the back of higher volumes, cost rationalisation, higher private label sales and lower debt are triggers which are expected to sustain the rally.

After muted demand trends in the early part of the March quarter (Q4FY22) due to