 "clothes, consumption, showroom")
Even as the apparel sector witnessed continued weakness in sales during the January-March quarter, jewellery is expected to shine on the back of higher gold prices. The apparel sector’s weakness is due to lower disposable incomes coupled with a high base from the same quarter last year.
On the other hand, jewellery companies are expected to witness strong growth in top line due to higher gold prices during the quarter.
“Titan Company has reported a healthy 18 per cent year-on-year (Y-o-Y) growth in the jewellery business. We expect earnings before interest and taxes (Ebit) margin of 13.3 per cent (ex bullion),” IIFL Securities said in its report.
The brokerage also added that Titan will be able to maintain a high-teen growth in the medium term, benefiting from an accelerated shift to the organised sector from unorganised.
It also added that in apparel, retail companies are expected to report an aggregate revenue growth of 21 per cent for the coverage. Excluding Trent, it expects growth to be 11 per cent. “March performance was much better than the previous months, driven by festival demand,” Phillip Capital said in its report on the sector.
It added that discounting was relatively lower during the January-March quarter. And, consumption may increase in the first quarter of FY25 as green shoots have been seen in Tier-II and III markets.
Emkay said in its report that fashion, apparel, and innerwear trends remain weak due to pent-up demand last year (on a high base) and lower disposable incomes.
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“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. Motilal Oswal expected Page Industries to see a 9.8 per cent Y-o-Y rise in revenue on the back of seasonality and base effect. It expects gross margin and earnings before interest, taxes, depreciation and amortisation (Ebitda) margin increase of 150 basis points (bps)/430 bps Y-o-Y during the quarter. IIFL expects Trent to report a 51 per cent increase in sales, driven largely by store additions and ramp-up in sales per square feet in Zudio. “At the end of the quarter, Westside and Zudio store count stood at 225 and 518 — implying 11 and 166 store additions, respectively, for FY24,” it added.
It is possible that some of these include converting smaller Westside stores in Zudio.”
The brokerage also said that V-Mart closed 10 stores during the quarter, taking its store count to 444. It believes that an extended winter should benefit the retailer.
However, it noted that core V-Mart same-store sales witnessed moderation from 5 per cent in October-December to 4 per cent in January-March.
