Gaurav Jogani of JM Financial Institutional Securities, in an interview with ET Now, highlighted that the jewelery segment witnessed significant growth, largely due to the 65% year-on-year increase in gold prices. “Apart from this, the footwear segment was a surprise. Casual premium footwear players grew in the mid-teens, and supermarket players also performed well. Apparel performed mixed due to an early shift in the festive season and a postponed winter,” he noted.
QSR players are adapting to consumer trends
The quick service restaurant (QSR) industry continues to stabilize, but growth is largely driven by pricing strategies. Jogani explains, “Most QSR players have started to drive value through discounts and combo offers. While transactions have stabilized, price discounts lead to lower same-store sales growth.”Margins and cost rationalization
QSR margins were better than expected, helped by cost-cutting measures and rationalization of unnecessary discounts. “Gross margins improved and cost management led to better than expected margins. We expect this trend to continue in the fourth quarter, although margins may decline sequentially as it is a non-seasonal quarter,” Jogani added.
Balancing between discounts and brand value
On the impact of discounts on long-term brand value, Jogani noted, “The intensity of discounts has reduced. Players are now focusing on value combinations to drive footfalls. This has helped improve gross margins while maintaining consumer interest.”
Company Highlights and Industry Outlook
Among discretionary stocks, Titan continues to be a strong performer, with robust revenue growth despite gold price volatility. “Titan drives EBITDA growth in a calibrated manner, leading to profit improvements,” Jogani said. Footwear brands have shown signs of recovery, and the sector could benefit from the GST transitions that also extend to smaller discretionary items.
Valuation perspectives
According to Jogani, valuations in the QSR and discretionary sectors have corrected from historical highs, with downsides limited. “If SSSG growth rates pick up again, we could see a trough in valuations and earnings,” he said.Industry competition and consolidation
Jogani downplayed the threat of regional cloud kitchens, pointing to consolidation in the sector due to macroeconomic pressures and financing constraints.
Key stats to keep an eye on
For the coming quarter, same-store sales growth and brand contribution margins will be the key focus, along with continued cost rationalization and advertising efficiency.
Top picks in the industry
Jogani highlighted preference shares and identified Titan, Lenskart, Metro Brands and Vishal Mega Mart in the discretionary sector. In QSR, Devyani and Sapphire remain recommended buys.
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