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Elara's Karan Taurani backs Nykaa, Trent and United Spirits as GST cuts lift discretionary demand
Elara Capital's Karan Taurani said apparel fabric costs have risen 15-20%, even as GST cuts lift discretionary demand with a lag, pointing to a stronger October-December quarter of 2026. He favours Nykaa, Trent and United Spirits.
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Why it matters to operators and investors
Elara's Karan Taurani favours Nykaa, Trent and United Spirits as GST cuts lift discretionary demand ahead of a stronger October-December quarter, with the 15-20% rise in apparel fabric costs the margin risk to watch.
What to watch next
- Trent's October-December quarter same-store sales growth and margin commentary
- Nykaa's quarterly GMV growth and management remarks on GST-linked demand
- United Spirits' premium-segment volume growth in its quarterly results
- Fabric and cotton price movements, and any further apparel price hikes by brands
- Further GST Council rate announcements or evidence of incomplete price pass-through at retail
The counter-case
The case against this reading — not reported by the source.
The call rests on a lagged demand recovery that has not yet shown up in reported numbers. The signal itself says GST cuts are lifting demand 'with a lag' and points to a stronger October-December quarter, which is a forecast. The one hard number in it, apparel fabric costs up 15-20%, cuts the other way. If retailers cannot pass that through, because consumers are price-sensitive or competition is intense, gross margins shrink even if volumes recover. A GST cut also lowers shelf prices, so the revenue benefit depends on volume growth outpacing the lower price per unit. A festive-season bump is easy to mistake for a durable shift, since October-December is seasonally strong anyway. Picking Nykaa, Trent and United Spirits together is a broad bet on discretionary spending across beauty, fashion and alcohol. These are different categories with different tax and cost drivers, so the GST thesis may not apply evenly. Quality retail stocks often already trade at premium valuations, so a recovery that is widely expected may be priced in, leaving little upside and a sharp fall on any miss.
The source
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