The report pointed out that the jewellery segment continued its strong growth momentum, driven by the steep increase in gold prices and rebound to high single-digit buyer growth
Underpinned by a broad-based demand recovery, consumer discretionary segment, excluding Eternal, is expected to deliver around 23 per cent year-on-year (YoY) revenue growth in the fourth quarter of financial year 2026, as per a report.
HDFC Securities Institutional Research said in a report that the topline performance is mainly driven by sustained momentum in jewellery (driven by a surge in gold prices), ongoing customer acquisition efforts in new-age businesses and recovery in apparel growth on-year basis.
“We expect jewellery, F&G, paints, apparel and footwear to clock around 47 per cent, 19 per cent, 5 per cent, 16 per cent and 9 per cent YoY revenue growth in Q4. Margins for our discretionary space (ex-Eternal) are expected to expand by 50 basis points YoY to 10 per cent, with Ebitda growth of around 29 per cent YoY,” the report added.
Uptick In Demand
The report pointed out that the jewellery segment continued its strong growth momentum, driven by the steep increase in gold prices and rebound to high single-digit buyer growth following three flat quarters. Apparel sector is likely to report around 16 per cent revenue growth YoY. Value apparel retailers are likely to outperform premium retailers, driven by recovery in SSSG and retail area expansion.
In footwear, Metro Brands is poised to continue its recovery trajectory, while other footwear players will likely report sluggish growth (on a low base). In paints, growth is expected to accelerate (on a low base), supported by pre-emptive channel stocking ahead of industry-wide price hikes in April.
The report mentioned that in new-age businesses, Nykaa is expected to sustain strong YoY growth as it continues to prioritise customer acquisition. In food delivery, less operational restaurants will likely impact ad revenues. However, the report noted that a minimal impact on order volumes is expected despite menu curtailments caused by LPG shortages. Quick commerce is expected to see a seasonal dip in average order values (AOVs) alongside a moderating non-grocery mix.
HDFC Securities added that with valuations moderating significantly following recent stock price corrections, and fundamental green shoots emerging across segments, most pockets of its coverage now offer a reasonable risk-reward ratio.
