Why Is MOSL Tracking Apparel And Footwear Demand In Retail Sector?
Motilal Oswal Securities Ltd (MOSL) has conducted retail channel checks across apparel and footwear segments, offering fresh insights into consumer demand patterns. With apparel gaining traction, branded formal wear improving, and value retail maintaining steady demand momentum, MOSL sees tailwinds ahead for select retail players. However, the footwear category remains subdued, awaiting relief from a potential GST cut and the festive season. The brokerage highlights that seasonality continues to influence sales but believes GST rationalization and festive demand could support growth in the coming quarters.
About Retail Sector And Key Companies
These companies are directly impacted by consumer confidence, discretionary spending, and taxation policies like GST. The festive season, combined with pricing and brand positioning, often becomes a make-or-break period for quarterly performance. MOSL’s findings suggest optimism for apparel-led retailers, while footwear players may have to wait for policy-driven catalysts.
Apparel Sector Showing Positive Momentum
Apparel consumption has recovered strongly post-pandemic, with rising urban incomes and higher aspirations driving premiumization. Players like Trent, ABFRL, and Shoppers Stop are expected to benefit from rising demand for mid-premium and premium clothing. At the same time, value retailers like V-Mart and Zudio (Trent) continue to capture aspirational consumers in Tier-2 and Tier-3 cities.
Footwear Awaiting GST Relief And Festive Push
Currently, GST rates have been a burden for affordable footwear products, hurting volumes in the value segment. A policy change could provide a significant boost, especially for companies heavily dependent on mass-market demand. Metro Brands, with its premium positioning, may be less impacted, while Relaxo and Bata would see meaningful relief.
Seasonality And Festive Tailwinds
India’s festive calendar, particularly during Diwali and wedding seasons, boosts discretionary consumption. Retailers often launch new collections, increase marketing spend, and offer promotions during this period, which helps accelerate sales growth. The upcoming festive quarter will be crucial in confirming whether apparel’s momentum sustains and footwear demand revives.
Branded Apparel: Loyalty-Led Growth
ABFRL, Trent, and Shoppers Stop are focusing on loyalty programs and customer engagement, ensuring repeat business. As hybrid work models sustain, formal and semi-formal wear demand is improving. Lifestyle-driven premiumization and an increasing youth demographic further support growth in branded apparel.
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Value Retail: Steady Growth Path
Companies like V-Mart and Trent’s Zudio have expanded aggressively into Tier-2 and Tier-3 cities. Their ability to provide fashionable products at affordable price points allows them to capture volumes. This segment benefits from India’s demographic dividend, urbanization, and rising disposable incomes.
Muted LTL Growth A Concern
This highlights a key risk for the retail sector. While store expansion can boost revenues, long-term profitability requires consistent improvement in same-store sales. Retailers with strong product differentiation, supply chain efficiency, and brand stickiness will be better positioned to sustain growth.
Investor Takeaway
MOSL’s retail channel checks highlight a mixed but cautiously optimistic outlook. Apparel shows strong momentum, especially in branded and value segments, while footwear demand is subdued but may revive with GST cuts and festive demand. Muted LTL growth is a concern, but structural tailwinds like rising disposable incomes, urbanization, and premiumization continue to support the long-term story. Investors may consider exposure to sector leaders with strong execution capabilities and brand equity.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
