Apparel retailers back on growth track on strong Q4FY26 recovery

Value fashion segment expected to do better driven by same-store sales growth and store additions

After a muted December quarter, the apparel retail sector is witnessing a rebound in the March quarter (Q4FY26), aided by higher same store sales growth and store expansion. While most listed players in the space have done well, the recovery has been robust for companies in the value fashion category.

 

Though most stocks in the sector have underperformed over the past three-month and six-month periods, they have started outperforming benchmarks significantly over the past month. Average returns of the listed apparel retail majors over the past month is 18 per cent, while the Nifty 50 delivered less than a third of that in this period.

 

JM Financial Research pointed out that apparel is witnessing a broad-based recovery — particularly in value fashion — following a dismal Q3 impacted by the festival shift to Q2. But the brokerage expects a weakness in the ethnic segment. Most apparel retailers had reported a fall in volumes and same store sales or reported sub-2 per cent growth in Q3. Barring Go Fashion, most players are expected to report a mid-single digit growth or higher on average in Q4. Go Fashion reported a 4 per cent year-on-year (Y-o-Y) decline in revenues in the March quarter, due to continued weakness in the large store format segment.

 

In the consumer retail space, analysts led by Gaurav Jogani of the brokerage highlighted that there are early signs of gains from rate cuts in the Goods and Services Tax (GST) and income tax, lower interest rates and replenishment demand translating into demand recovery.

 

HDFC Securities expects the apparel sector to report a Q4 revenue growth of 16 per cent over the year ago quarter. Jay Gandhi and Vedant Mulik of the brokerage also believe that value apparel retailers are likely to outperform premium retailers, driven by recovery in same store sales growth and retail area expansion.

 

The near-term trigger is the March quarter performance. Given the updates from multiple retail majors, the quarter should see the sector deliver robust growth rates.

 

V-Mart’s Q4FY26 pre-quarter update indicated a revenue growth of 24.5 per cent Y-o-Y, with same store sales growth of 12 per cent. Including the 23 store additions in fourth quarter, the company’s FY26 count is at 80 stores, higher than the guidance of 70-75 stores. This compares to 53 stores in FY25.

 

Antique Stock Broking has a "buy" rating on V-Mart stock, with a target price of ₹842 per share. Analysts led by Abhijeet Kundu pointed out that V-Mart witnessed improvement in same store sales growth and posted consistent double digit revenue growth, in a backdrop of intensifying competition during the last three years. This has been led by store expansion, recovery in Unlimited and reduction of Limeroad losses.

 

Trent reported a standalone revenue growth of 20 per cent Y-o-Y, which was better than expectations and also higher than the 16-17 per cent growth in the September and December quarters of FY26. This was driven by higher store additions.

 

Antique Stock Broking expects the company to generate a revenue growth of 19 per cent and an operating profit increase of 24 per cent over FY25-28, on the back of a focus on organic portfolio, disciplined scaling of operations and exploring emerging categories (Burnt Toast catering to Gen-Z) with large opportunities to scale up.

 

Other retailers which delivered a healthy growth in the quarter were V2 Retail, which saw a same store sales growth of 7.74 per cent and standalone revenue growth of 59 per cent. Bazaar Style Retail delivered a revenue growth of 35 per cent and same store sales growth of 8 per cent in the January-March quarter.

 

Brokerages are also positive on Vishal Mega Mart. Emkay Global Research has a "buy" rating on the stock with a target price of ₹170. The brokerage pointed out that value retail players have indicated encouraging growth momentum, and expect Vishal Mega Mart to post a strong 20 per cent revenue growth with 10 per cent same store sales growth.

 

Analysts led by Devangshu Bansal of the brokerage remain confident of sustained double-digit same store sales growth on an annual basis, aided by its differentiated private label strategy, GST reduction, and healthy traction in the quick commerce business.

 

Emkay Research expects Page Industries to deliver 10 per cent Y-o-Y revenue growth in Q4, as compared to 4 per cent in 9MFY26, led by an improvement in volume growth to 7 per cent from low single-digit growth nine months prior. The pickup in volume growth is driven by easing competitive intensity in the men’s and women’s innerwear category, with Page Industries focusing on capitalising on the opportunity through product refreshes across price points, continued distribution expansion, and higher marketing spends, it added.