Apparel Sector Check - Margins To Surprise As Demand Bounces Back: ICICI Securities
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ICICI Securities Report
We believe earnings of apparel brands and retail companies under our coverage may surprise positively from Q3 FY22E as the likely demand recovery may result in better than expected margin performance.
Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre Covid-19 margins from Q3 FY22E, in our view.
Global apparel companies have raised their earnings outlook in recent times resulting in consensus upgrading of FY23-24E Ebitdas by 10-20%.
Our FY23-24E Ebitda for coverage universe are 6-12% ahead of consensus.
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