Right Horizons flags apparel as a long-term consumer-discretionary alpha theme
Right Horizons PMS founder Anil Rego cites premiumisation, urbanisation, rising incomes and organised retail share gains. He expects India’s apparel market to grow from ₹5.47 lakh crore in FY23 to ₹10.68 lakh crore by FY27, implying an 18% CAGR.
What happened
Right Horizons PMS founder Anil Rego identifies consumer discretionary as a long-term India alpha theme, citing premiumisation, urbanisation, rising incomes and
Key facts
- Nifty earnings growth projected at about 12% CAGR in FY26-FY28E
- India apparel market projected to grow from ₹5.47 lakh crore in FY23 to ₹10.68 lakh crore by FY27
- Apparel market growth implied at 18% CAGR
- Manufacturing share of GDP is nearly 16%, with a target above 25% by 2035
- India EMS market projected to grow from $40 billion in FY25 to $150 billion by FY30
Why this matters
Prioritise acquisitions or partnerships that add differentiated brands, regional distribution and digital capabilities before organised retail’s share gains intensify competitive valuations.
What to watch
- Quarterly apparel same-store sales growth versus overall retail sales and consumer-discretionary spending.
- Organised retail share gains, especially in Tier-2 and Tier-3 cities.
- Fashion retailer inventory days, markdown intensity and gross-margin trends.
- Store-opening pace, mall occupancy, leasing spreads and new retail supply.
- Real wage growth, food inflation, urban employment and consumer-confidence readings.
- Premium-category growth versus mass/value apparel volume growth.
- E-commerce fashion penetration, return rates and profitability of omnichannel fulfillment.
- Track store-addition pipelines, same-store sales growth and inventory turns at branded apparel, value-fashion and department-store retailers.
- Watch whether retailers expand private labels and localised assortments to serve Tier-2 and Tier-3 demand without sacrificing gross margin.
- Expect mall developers, retail real-estate owners, logistics providers and apparel contract manufacturers to benefit from higher organised-retail penetration.
- Monitor consolidation opportunities as smaller regional chains seek capital, omnichannel capabilities and procurement scale.
- Assess textile and apparel suppliers for a shift toward faster replenishment, smaller batches and higher-value fabrics as brand-led retail scales.