In its latest sectoral update, Nuvama Institutional Equities said affordable fashion, jewellery and premium footwear were the best performing sectors in the retail sector in Q1FY25.
What Happened: The brokerage has a positive outlook for the retail sector on the back of a promising festive season and a bustling wedding season ahead. Nuvama also expects new store openings and online sales to accelerate in the coming quarters.
Torrent, V-Mart and Titan are its top picks in the sector, the brokerage said in a note.
The company said apparel sales struggled during the quarter due to extreme heat, fewer weddings and weak consumer sentiment. Torrent's performance was the standout performer in the segment, while off-price retailers like V-Mart posted double-digit same-store sales growth for the first time in four quarters. Nuvama remains optimistic about the segment ahead of the upcoming festive and wedding seasons.
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Jewellery sales were also hit by a decline in weddings and rising gold prices also exacerbated the sector's slump, but a cut in customs duty on gold to 6% from 15% and tax rate to 9.3% from 18.5% are likely to boost sales, Nuvama added.
In July, shares of jewellery companies soared after Finance Minister Nirmala Sitharaman proposed reducing basic customs duty on gold and silver to 6%.
The industry saw a temporary drawdown in stocks due to the tariff cut, but viewed it as a positive move to curb the influx of smuggled gold into the country, and the sharp fall in prices is also seen as boosting demand.
Price Trend: On Tuesday, Trent was down 1.52% to ₹6,820, Titan was down 1.89% to ₹3,561.60 and V-Mart was up 0.26% to ₹3,561.60.
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