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India’s organised apparel retail sector expected to grow by 12-13% in FY27: Crisil Ratings
Sep-11-2026

Crisil Ratings in its latest report has said that India’s organised apparel retail sector is expected to grow by 12-13 percent this fiscal (FY27), moderating from the 15 per cent growth recorded in the previous year, as consumers increasingly spread discretionary spending across categories beyond clothing. The report revenue growth has been broadly steady so far in the high single digits between April and August 2026, but has largely been driven by the value-fashion segment.

It stated the growth is expected to be driven by strong demand for value fashion, expansion of organised retail beyond big cities and continued preference for branded apparel. Credit profiles are expected to remain stable because retailers are pursuing calibrated expansion strategies in larger cities that do not strain balance sheets, and expansion in smaller cities requires a relatively lower capital outlay.

Further, it said higher cotton prices and rising operating costs are likely to squeeze margins, as intense competition may limit retailers' ability to pass on higher costs to consumers. Operating margins are expected to moderate by about 100 basis points, reaching 14% in the current fiscal year. The festive season, which has recently commenced, will be crucial to the sector's growth outlook as festive demand typically contributes nearly 35% of annual apparel sales.


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