Retail stocks to buy before Q2 results: Metro Brands, Campus Activewear, Vishal Mega Mart shares — Elara recommends
India's retail sector is expected to report steady revenue growth in the September quarter, supported by value retail, footwear and innerwear, even as subdued apparel demand and a shift in festive spending weigh on some segments. Metro Brands, Campus Activewear and Vishal Mega Mart are among the preferred retail stock picks of Elara Securities ahead of the Q2FY27 earnings season.
Elara Securities has assigned a Buy rating to Vishal Mega Mart, Page Industries, Vedant Fashions, Safari Industries, Dollar Industries, Metro Brands and Campus Activewear. The brokerage has an Accumulate rating on VIP Industries, Bata India and Relaxo Footwears, while Go Fashion has been rated Reduce.
In its retail sector preview, Elara Securities expects its retail coverage universe to deliver revenue growth of around 11.8% year-on-year (YoY) and EBITDA growth of approximately 12.7% in Q2FY27. Aggregate EBITDA margins are projected to improve by about 13 basis points to 15.5%, as operating leverage offsets inflation in cotton and crude-linked input costs.
Premium categories are expected to continue outperforming, while demand in the mid-market segment is likely to remain selective and promotion-led. Organised retailers could also gain market share from smaller players, which continue to face pressure from elevated input costs, the brokerage said.
Festive demand fell in the base quarter last year, when Navratri began on 22 September 2025. This year, the festival shifts to Q3FY27, while the Shraddh period is expected to delay some purchases until late September, according to Elara Securities.
The brokerage expects apparel revenue across its coverage universe to decline by around 3.8% YoY in Q2FY27, with EBITDA falling approximately 5%, as subdued demand, input cost inflation and operating deleverage weigh on performance.
Vishal Mega Mart is expected to outperform, with revenue projected to grow 17.5% YoY and same-store sales growth (SSSG) estimated at around 6%, supported by store additions.
In contrast, Vedant Fashions and Go Fashion are expected to report modest SSSG of approximately 1% and 0.6%, respectively. Delayed festive demand, weak off-season wedding demand and ongoing store rationalisation are likely to constrain their performance.
Footwear demand remains healthy, driven by premiumisation, calibrated price increases and expansion across retail and digital channels, Elara Securities said.
The brokerage expects its footwear coverage universe to post revenue growth of around 8.8% YoY and EBITDA growth of 10% in Q2FY27.
Metro Brands is expected to lead the segment, with projected revenue growth of 13.2% YoY, supported by higher volumes and a favourable product mix.
Relaxo Footwear's recovery is expected to be driven by improved realisations, although margins may remain under pressure. Bata India, meanwhile, is likely to report modest revenue growth but a stronger profit after tax (PAT) recovery, aided by lower markdowns and cost-control measures.
The innerwear segment is expected to record revenue growth of approximately 11% YoY in Q2FY27, supported by volume momentum at Page Industries, the spillover of three days of undelivered billing from Q1, and the impact of May's price increase.
New product initiatives, including the Disney-Marvel launch and expansion in athleisure, are also expected to support demand.
However, profitability may remain under pressure at Page Industries and Dollar Industries as higher-cost cotton inventory flows through the cost of goods sold. Recent price increases are expected to partly offset input cost inflation, while Dollar Industries could face additional pressure from volume weakness following price hikes and elevated employee costs.
The organised luggage segment is expected to sustain its recovery, supported by new product launches, price increases and a weak base at VIP Industries.
Elara Securities projects revenue growth of around 10.9% YoY for the segment. Safari Industries is expected to report growth of approximately 11%, aided by e-commerce traction.
VIP Industries' EBITDA loss is likely to narrow materially, although its EBITDA margin is expected to remain negative at around 9%.
Elevated discounting, higher resin costs linked to crude oil prices and increased marketing expenditure could weigh on profitability. Safari Industries' EBITDA margin is expected to contract by around 193 basis points, according to the brokerage.
The key factors for retail investors in Q2FY27 will be the timing of festive purchases, demand trends across price segments, store expansion and the extent to which retailers can pass on higher input costs.
While value retail, footwear, and innerwear are expected to support sector growth, apparel retailers could face near-term pressure due to the shift in festive demand into Q3FY27. Elara Securities' preference for Metro Brands, Campus Activewear and Vishal Mega Mart reflects its focus on companies with stronger growth prospects.
Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.
Get Latest real-time updates
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
HomeMarketsStock MarketsRetail stocks to buy before Q2 results: Metro Brands, Campus Activewear, Vishal Mega Mart shares — Elara recommends
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.