Fashion
Ind-Ra expects India’s apparel retail revenues to grow 9% YoY in FY26
Ind-Ra expects sector revenues to grow around 9 per cent year on year (YoY) in FY26 and 10.5 per cent YoY in FY27 following uneven and subdued growth through FY24 and early FY25; the growth in FY25 was 8 per cent YoY.
Ind-Ra expects India’s apparel retail sector revenues to grow around 9 per cent YoY in FY26 and 10.5 per cent YoY in FY27 following uneven and subdued growth through FY24 and early FY25.
Premium, branded and ethnic players are expected to see steadier, high single-digit growth trends.
Ind-Ra feels value retailers will outperform other segments within apparel, with robust revenue growth.
Ind-Ra feels value retailers will outperform other segments within apparel, with robust revenue growth through healthy same store sales growth and rapid store additions, albeit at a lower profitability.
Healthy growth in operating profit coupled with strong inventory turns is expected to result in value retailers demonstrating stronger-than-industry return indicators and credit metrics.
Premium, branded and ethnic players are expected to see steadier, high single-digit growth trends as consumer confidence rebuilds with a better spread out wedding calendar than in FY26 and early signs of normalisation seen in the first nine months of FY26.
Listed apparel retail players from Ind-Ra’s sample set reported revenue growth of around 10 per cent YoY in these nine months as the government’s consumption push through lower taxation and mild inflation resulted in higher disposable income and improved affordability.
The operating profit margins also improved to 15.6 per cent in the nine months compared to 15.2 per cent in FY25 due to various cost optimisation measures adopted by companies.
Organised retailers are pivoting from aggressive expansion to productivity-led growth. After elevated store additions in FY24-FY25, Indian apparel retailers are moderating store roll-outs, sharpening site selection, right-sizing formats and targeting faster ramp-ups of recent openings, with omni-channel execution and scalable franchise models enhancing reach and capital efficiency, Ins-Ra said in a press note.
It expects store additions to ease to nearly 7 per cent YoY in FY26 and 6 per cent YoY in FY27, even as retail area continues to rise by 9 per cent YoY in FY26 and by 9.5 per cent YoY in FY27, reflecting larger average store sizes and assortments designed to lift footfalls, average transaction values and sales per square foot.
Value and luxury segments are set to lead sector performance. Value formats benefit from GST rationalisation at lower price points, improved affordability, and rising private-label penetration, while luxury gains from a widening affluent base and deeper global-brand access.
Fast fashion continues to capture Gen-Z-led, content-driven demand. Casual and athleisure remain ahead of ethnic-casual and formal wear, in line with comfort- and lifestyle-led dressing trends.
Ind-Ra expects profitability to improve gradually as cost optimisation, better sourcing/mix, disciplined advertising and marketing promotions, and operating leverage offset residual pressures from expansion and fixed costs.
The working capital cycle for value retailers is likely to improve YoY in FY27, due to higher inventory turns and improved store level operating metrics.
Overall, as the consumption upturn broadens and retailers prioritise productivity over pace, Ind-Ra expects a stable, sustainable improvement in revenues and operating metrics for organised apparel retailers over FY26–FY27.
The luxury segment is also expected to benefit from an increase in target customer segment through widening affluent base and deeper global-brand access.
Mid-premium and several incumbent retailers witnessed slower growth in FY25, due to entry price mix-shifts and loss of market share to value retailers. This, coupled with investments in store format revamps, has stressed their margin profiles. Profitability pressures and a dip in inventory turns have slightly weakened credit metrics for segment players.
Fibre2Fashion News Desk (DS)
Following earlier increases in purified terephthalic acid (PTA), melt and PSF, Indian producers have now raised PFY prices. POY, FDY and PTY prices have been increased by ****;* per kg across all deniers and lustres with effect from March *, reflecting rapid cost pass-through amid heightened volatility in crude-linked value chains, according to the market sources.
In the previous weekly revision effective February **, ****, PTA was increased by ****;*.** per kg to ****;**.** per kg, while monoethylene glycol (MEG) was retained at ****;**.** per kg. Polyester melt prices were raised by ****;*.** per kg to ****;**.** per kg. Downstream PSF prices were also revised upward by ****;*.** per kg from March *.
May 2026 cotton settled at 64.59 cents per pound, down 1.02 cents. This marked the lowest settlement price for May contract since February 20, effectively erasing all gains made over that period.
Cotton futures on Intercontinental Exchange (ICE) fell over 1 per cent, with May 2026 settling at 64.59 cents/lb, the lowest since Feb 20, amid Middle East tensions and a stronger US dollar.
Rising inventories and risk aversion pressured prices.
Speculators cut net shorts, while crude oil surged.
ICE cotton traded mixed in early Indian hours today.
Total trading volume for the session came in at 73,225 contracts. ICE-certified deliverable No. 2 cotton inventory rose to 126,178 bales as of February 26, up from 119,457 bales the previous trading day.
The US dollar climbed to its highest level in over a month, making dollar-denominated commodities like cotton more expensive for international buyers and reducing export demand.
Market analysts stated that the Middle East conflict is putting significant pressure on cotton and that a broader risk-aversion tone is affecting the market.
On March 2, Iran continued launching attacks on US military bases across multiple countries in the Middle East, with explosions reported in several locations. An advisor to the Iranian Islamic Revolutionary Guard Corps commander announced that the Strait of Hormuz had been closed, with Iran threatening to strike any vessels attempting to pass through it.
US President Trump indicated that military action against Iran could last four to five weeks, while also expressing readiness for operations to extend considerably longer.
Major Wall Street indices declined on Monday as the conflict raised fears of disrupted global trade routes and renewed inflationary pressures. Analysts warned that investors appear to be rebuilding short positions in cotton, suggesting continued downward price pressure in the near term. The earlier May contract low of 62.86 cents per pound as a key support level that could be tested again.
CFTC data released the prior Friday showed that speculators reduced their net short positions in ICE cotton futures and options by 26,508 contracts in the week ending February 24, bringing net shorts to 48,922 contracts.
International crude oil and natural gas prices surged sharply on Monday following US and Israeli strikes on Iran, with retaliatory actions forcing the closure of several energy facilities in the region.
This morning (Indian Standard Time), ICE cotton for May 2026 was traded at 64.75 cents per pound (up 0.16 cent), cash cotton at 62.59 cents (down 1.02 cent), the March 2026 contract at 62.59 cents ((down 1.02 cent)), the July 2026 contract at 66.75 cents (up 0.14 cent), the October 2026 contract at 68.18 cents (down 0.49 cent) and the December 2026 at 69.04 cents (up 0.12 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
Fibre2Fashion News Desk (KUL)
If the US administration imposes a 15-per cent levy, the US ETR would rise to 11.3 per cent.
President Donald Trump reinstated tariffs immediately following the US Supreme Court’s February 20 ruling that invalidated the reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The new blanket 10-per cent tariff rate is authorised under Section 122 of the Trade Act of 1974 and expires in 150 days unless extended by Congress.
The 10-per cent blanket reciprocal tariff imposed by the US on most trading partners has reduced the US effective tariff rate (ETR) to 9.4 per cent from 12.7 per cent, Fitch Ratings said.
If a 15-per cent levy is imposed, the ETR would rise to 11.3 per cent.
China has the highest ETR among trading partners, followed by Vietnam, Japan and Brazil.
China’s ETR is around 19 per cent from 29 per cent earlier.
Section 122 permits a maximum rate of 15 per cent but does not allow for tariff adjustments for individual countries.
Prior to the court decision, China was subject to two reciprocal tariffs: a fentanyl tariff of 10 per cent that applied to all imports and a 10-per cent reciprocal tariff on an import base subject to carveouts. The two tariffs have been consolidated into the 10-per cent blanket tariff, reducing China’s ETR to around 19 per cent from 29 per cent, Fitch said in a release.
China still has the highest ETR among major trading partners, followed by Vietnam, Japan and Brazil. Of the United States’ 31 largest trading partners, 26 will see their ETRs decline. Brazil benefits the most, with its ETR decreasing by 18 percentage points (pp) to 11 per cent from 29 per cent.
ETRs for most countries largely remain unchanged following the switch in tariff regimes, and no country will see an increase in its ETR if the Section 122 tariff rate remains at 10 per cent.
Fibre2Fashion News Desk (DS)
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