Elara Capital’s Karan Taurani warns that the benefits of last year’s GST cut are now seeping into smaller discretionary categories. The initial lift came through automobiles and white goods, where consumers saved more, but the impact is now filtering into apparel, footwear and food, and the festive season’s push to the third quarter should boost October‑December growth beyond July‑September.
Platform‑led players are front‑and‑center in Taurani’s view. Nykaa and Eternal snagged the top of his list, citing their stronger growth prospects and the continued shift toward online shopping. The same logic is applied to United Spirits, where spirits are seen as better positioned than beer, owing to lower glass‑cost exposure and premiumisation trends.
But higher input costs loom large. Fabric prices in apparel have jumped 15‑20%, and price‑sensitive fast‑fashion brands may struggle to pass on the hike. Food‑and‑beverage firms face a similar drag: higher maize prices have pushed up cattle‑feed costs, feeding into protein, milk and other raw‑material prices.
In the alcohol arena, United Spirits, Tilaknagar Industries and Allied Blenders are positioned for near‑term gains, yet Radico Khaitan could see margin pressure from the maize‑price surge. Taurani notes that inflation will keep earnings growth under check for most of the segment.
Tackling the medium term, Trent receives a positive nod despite near‑term margin headwinds. Competition is easing in the fast‑fashion market, and as raw‑material inflation cools, the company’s trajectory should improve over the next couple of quarters, making it a more attractive medium‑term bet.
With earnings growth expected to be uneven, investors should monitor each company’s guidance, particularly how they navigate rising input costs while capitalising on the GST‑driven consumer lift.