Downgrades

With a 10% upside potential from the CMP, we maintain our BUY rating on the stock.

ABLBL reported a modest 4% YoY revenue growth (vs. 11% for Arvind Fashion) in 2QFY26, as strong 12% LTL retail growth was offset by the adverse impact from recent store rationalization and GST-related transition on wholesale primary sales.

Aditya Birla Fashion and Retail (ABFRL) reported a weak 2Q as higher A&P spends (up 200bp YoY) and losses in TMRW led to a 14% decline in reported EBITDA (37% miss). Pre-Ind AS EBITDA for 1HFY26 declined ~12% YoY.

Bata India's (Bata) Q2FY26 result was below our estimates on key parameters. The management cited GST 2.0 transition caused significant and acute disruption during the quarter, impacting the overall top line. The period between the rate rationalization announcement and the effective date saw substantial consumer and channel partner deferral in buying. However, the company anticipates structural benefits from the GST reduction, especially aiding the lower price point segment (below Rs1,000) which has been under stress for the past two years. Further, there is a structural shift in consumer...

With a 7% downside from the CMP, we maintain our HOLD rating on the stock.

Vedant Fashion’s (VFL) 2Q performance was impacted by GST-linked dispatch disruptions, creating a ~6% delta between primary and secondary sales. However, the company has been struggling to revive growth sustainably, with its 1HFY26 revenue tracking 5% below 1HFY23 levels.

We recommend HOLD a rating on the stock

IndiaMART (INMART) reported 2QFY26 revenue growth of 12% YoY vs. our estimate of 9.5% YoY growth. Deferred revenue rose 17% YoY to INR17.5b.

We recommend a BUY rating on the stock with a TP of Rs 845/share, implying an upside of 10% from the CMP.

With a 3% downside from the CMP, we maintain our HOLD rating on the stock.

With a 0% upside from the CMP, we maintain our HOLD rating.

Bata India's (Bata) Q1FY26 result was in-line with our estimates on key parameters. Q1FY26 was relatively tough, showing only flattish growth, though it seemed slightly better than the previous quarter. There is still stress in the mass segment, particularly the middle and mass segments of the consumer base. Consumers in the target middle-class segment have experienced a pinch due to inflation, necessitating a focus on value for money in products. Further, there is a structural shift in consumer behaviour towards online platforms, leading to growth in e-commerce and direct-to-consumer (D2C) brands. The...

Aditya Birla Fashion and Retail (ABFRL) delivered a better-thanexpected operational performance in 1QFY26, with revenue growth of 9% YoY (strong performance in Ethnics and TMRW) and EBITDA growth of 25% YoY (~22% beat,) driven by 16-24pp improvement in profitability for Ethnics and Luxury Retail.

Trent Ltd is a leading Indian retail company that operates stores under the Westside, Zudio and Star Bazaar brands, specialising in apparel, footwear, accessories, toys, games and other lifestyle products....

We cut FY26/FY27 EPS estimates by 1.9%/4.5% driven by 1) Higher store additions in a subdued demand environment, to likely increase overheads in the near term. We estimate margin contraction of 64bps/14bps in FY26/FY27 and 2) Weak store economics, driven by lower throughput/store amidst continued muted consumer sentiment. However, we believe operating parameters may improve in medium term only, led by 1) Stable store-level economics, aided by expansion into Tier-2 and Tier-3 cities. 2) Normalization of BIS-related issues in...

Trent’s Q1FY26 performance beat expectations led by higher EBITDA margin than expected, while SSSG moderated to low-single digits versus mid-single digits in Q4FY25.

Metro Brands’ (MBL) 1QFY26 revenue grew 9% YoY on a low base (-1% YoY in 1QFY25), driven by a 45% growth in E-commerce and a modest ~4% YoY growth in in-store sales (on the back of ~8% YoY area additions).

With a 15% upside potential from the CMP, we maintain our BUY rating on the stock.

Relaxo Footwears Ltd.'s (Relaxo) Q1FY26 result was below our estimates on key parameters. The company had yet another quarter of weak performance as sales volume declined. We believe there is no major uptick in demand environment post muted performance in Q4FY25 as well. The management's prudent cost cutting has been detrimental in operating margin improvement in Q1FY26. We believe Relaxo's earnings may remain under pressure in near term as sales volume may remain muted. However, the management is taking strategic steps such as the Retailer Parivar App, broadening the ecommerce...

With an 8% upside from the CMP, we maintain our HOLD rating on the stock.