Organised Retail Apparel Sector Set for 8-10% Growth This Fiscal Year: Crisil Report

The organised retail apparel sector is poised for 8-10% revenue growth this fiscal year, driven by a normal monsoon, easing inflation, and increased demand during the festive and wedding season. Fast fashion and premium clothing are key revenue drivers. Retailers are focusing on cost control and efficiency to maintain stable credit profiles.

The organised retail apparel sector is expected to achieve an 8-10% revenue growth this financial year, supported by factors such as a normal monsoon, easing inflation, and heightened demand during the festive and wedding seasons, according to a report released by Crisil Ratings on Tuesday.

The mass market segment, constituting 60% of total sales, is a critical revenue driver owing to the rising popularity of fast fashion, which features trendy, affordable clothing. Demand for premium attire during festive occasions will further bolster overall revenue growth, as per Anuj Sethi, Senior Director at Crisil Ratings.

Despite these growth projections, the sector will see a slower pace compared to the 11-12% compound annual growth rate from 2018 to 2023, leading retailers to exercise caution in opening new stores. Instead, efforts will center on optimizing existing locations, controlling costs, and minimizing external debt to sustain operating margins between 7.2-7.4%.

(With inputs from agencies.)