Apparel And Jewellery Retailers To Clock Double-Digit Growth In FY27

Chennai : Apparel retailers and jewellery retailers are poised for a double-digit revenue growth in FY27. While apparel retail growth will improve from an estimated 9 per cent in FY26 to 10.5 per cent FY27 due to the demand from Tier-2+ cities, jewellery retailers will see gold price-led growth cooling off from 23 per cent in FY26 to high-teen levels in FY27.

From 8 per cent growth in FY25, apparel retailers are set to see higher growth of 9 per cent in FY26 and 10.5 per cent in FY27, according to India Ratings.

Growth, however, will remain divergent across formats, with value retailers outperforming due to resilient Tier-2 and beyond demand and the ongoing shift from unorganised to organised trade. Premium, branded and ethnic players are expected to see steadier, high single-digit growth trends as consumer confidence rebuilds with a better spread-out wedding calendar than in FY26 and early signs of normalisation seen in 9MFY26.

The government’s consumption push through lower income tax and GST rates and mild inflation resulted in higher disposable income and improved affordability.

“We expect a steady uplift for the organised apparel retail sector in FY27, supported by a consumption revival led by improving consumer sentiment, superior real wage growth, and recent policy measures boosting household disposable income. Strong aspiration-driven momentum in value and luxury segments and productivity‑driven expansion are expected to deliver higher revenue growth with expansion in profit margins during FY27,” says Adarsh Gutha, Associate Director, Corporate Ratings, Ind-Ra.

Jewellery sector’s resilience and ability to absorb shocks from geopolitical tensions, trade wars, and demand pressures in FY26 have positioned it as an outperformer within the Indian retail sector. Ind-Ra has accordingly raised its FY26 revenue growth targets by 600bp to 23 per cent, led by price effects, and expects it to settle at a high-teen rate for FY27 on a high base.

“Jewellery volumes are set to drop sharply in FY26 – the steepest post‑pandemic decline, due to high gold prices, but strong festive and wedding-season buying in 2HFY26 boosted sentiments, even at record‑high prices, leading to an upward revision in our revenue growth expectations,” says Preeti Kumaran, Senior Analyst, Corporate Ratings, Ind-Ra.

Reshaping consumer behaviour to accept record-high gold prices as the new normal, along with re-aligning the product mix by increasing the proportion of studded jewellery, lower-purity gold jewellery, light and ultra-light pieces for the mass segment to accelerate inventory turns, will aid jewellers in navigating industry challenges over the near to medium term,” she said.

Trust, transparency, and regulatory compliance will continue to benefit organised jewellers, resulting in CAGR growth of 17 per cent over FY26-FY28, a faster pace than the 7 per cent forecasted for unorganised jewellers.

With gold outperforming with exceptional returns among various asset classes, investment demand is expected to remain steady. In the ongoing volatile price scenario, most jewellers will continue hedging through daily/weekly replenishment models to average out prices, and overall revenue growth will remain intact, as price gains offset any volume decline and volume growth offsets any price corrections.