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Q1 was a challenging quarter from a macro perspective, with inflation in some key raw materials, price hikes by brands across a few consumption categories, and an inauspicious consumption period (Adhikmas), based on which we expect mixed performance across categories. K-shaped consumption trends and discretionary spends continue, with luxury/jewelry/eyewear categories continuing to deliver strong growth (LENSKART/ETHOS/TTAN), while select pockets such as PAG/DEVYANI are seeing decent growth acceleration. We cut estimates by ~5% for DMART/VBL/JUBI on slower-than-expected growth trends, while earnings rollover to Jun-28E lifts TPs by ~5% across most of our coverage names. We maintain our ratings across the coverage universe, with TTAN/LENSKART/PAG/VMM/DEVYANI remaining our preferred picks.

PAG: Expect healthy volume-led growth momentum to accelerate

We expect PAG to accelerate its growth momentum and deliver ~14% yoy revenue growth in Q1, led by strong volume growth of ~11%, compared with low single-digit growth in FY26. We believe the pickup in volumes is driven by easing competitive intensity in the men’s and women’s innerwear category, with PAG capitalizing on the opportunity through product refreshes across price points, continued distribution expansion, and higher marketing spends. We expect EBITDA margin to contract by ~80bps, as we factor-in growth investments in channel activations, IT, and marketing.

Lenskart: Expect overall strong performance to continue

We expect Lenskart to sustain its strong momentum in Q1, after a robust FY26. We expect 28% yoy adjusted revenue growth in Q1, led by ~13/20% India/International SSG, with the rest coming from store additions. Adjusted EBITDA margins are also expected to improve by ~100bps, as the company benefits from the operating leverage driven by strong sales growth. We reiterate BUY on LENSKART and increase our TP by ~8% to Rs675 from Rs625, largely due to the rollover to Jun-28E earnings.

VMM: Expect structural double-digit SSG story to remain intact

We maintain BUY on VMM and increase our TP to Rs170 (55x Jun-28E EPS) from Rs160. Value retail players have indicated encouraging growth momentum, and we expect VMM to post strong ~19% revenue growth with 10% SSG. We remain confident in sustained double-digit SSG on an annual basis, aided by its differentiated private label strategy, GST reduction, and healthy traction in the QC business. We expect EBITDA margins to be broadly stable, with higher RM costs likely to offset the benefits of operating leverage.

DMART: Growth momentum moderates; maintain structural SELL

DMART reported ~15% yoy revenue growth in Q1 and was unable to sustain the growth momentum after reporting a positive surprise in Q4 (~19% growth). The growth moderation comes despite a strong store rollout in Q4 (58 vs 28 yoy), which, in our view, should have contributed incrementally to Q1 growth. We expect LFL growth of ~3%, lower than the recent normalized trend of 7-8%. EBITDA growth is expected at ~18%, led by better gross margins. DMART currently trades at a 1Y fwd PE valuation of ~70x, which we believe is expensive relative to its current growth and ROIC profile. We maintain SELL and TP of Rs3,700.

METROBRA: Mid-teen growth to continue; store additions to remain healthy

We reiterate BUY on Metro with an unchanged TP of Rs1,250 (57x Jun-28E pre-IndAS EPS). We expect ~15% yoy revenue growth in Q1 led by the ramp-up in store additions (specifically Walkway). We expect gross margin to be stable at ~59% on the back of strategic RM stocking in Q4, while EBITDA margins are likely to remain strong at ~31%. We continue to maintain our positive stance, supported by strong mid-teen growth prospects bolstered by growth in the existing portfolio (Metro/Mochi/Walkway/Crocs), new scalable exclusive partnerships (Foot Locker/FILA/Clarks), and optionality from Metro’s positioning as a preferred partner for incoming global brands, backed by a healthy balance sheet with ~40% cash at FY26-end.

Ethos: Expect strong performance to sustain; margin to remain under pressure

We reiterate BUY on Ethos, as we expect its outperformance to sustain, with ~28% yoy growth in Q1, helped by K-shaped growth trends in the luxury segment, ‘ahead of the curve’ investments in people and real estate, and a strengthened balance sheet (~Rs8bn cash). Additionally, margins have tangible tailwinds from the gradual elimination of customs duty and the ramp-up of luxury store locations (Mall of Asia/City of Times). However, Q1 EBITDA margin is likely to remain under pressure (~50bps impact in Q1) due to a timing mismatch between MRP revisions and rupee depreciation.

VBL: Volume growth to aid high-teen topline growth; margins key monitorable

We expect ~19% yoy revenue growth, led by ~14% growth in India and 36% growth in international operations. India volume growth expectations of ~17% are led by a low base (-7% volume dip), pack upsizing, and introduction of new flavors. Given pack upsizing, we expect value growth to lag volume by ~3%, driving ~14% value growth for VBL. We expect crude inflation and consolidation of lower-margin Twizza acquisition to impact margins by ~140bps, driving a mid-teen EBITDA growth for VBL in Q1. VBL has a solid balance sheet (net debt-free vs ~1.0x D/E historically), which allows it to pursue growth, presenting scope for capturing value-accretive opportunities. We maintain BUY on the stock, with an unchanged TP of Rs620.

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