If there is one thing that India’s middle class loves more than savings, it is spending smartly and then bragging about the discount. From premium face creams bought on flash sales to a family movie night “because it was a one-plus-one offer”, India’s spending story is as relatable as it is remarkable.
India’s consumption wave is entering an unprecedented phase, powered by rising disposable incomes, digital adoption, and widening aspirations.
The retail map is changing fast, with unorganised markets giving way to branded players and a deeper focus on trust, hygiene, and lifestyle value. India’s $240-billion loose consumption economy is tightening as more consumers choose labelled, reliable, and aspirational brands.
For this analysis, we focus on four categories that best mirror this middle-class transition—apparel, cosmetics, footwear, and entertainment—because they capture how Indian households are upgrading their daily lives without crossing affordability lines. In each of these segments, one company stands out as the most relevant play on India’s rising discretionary confidence.
Together, they reflect how the new middle class spends: on small luxuries, visible upgrades, and shared experiences that balance aspiration with value.
#1 Trent: A fashion leader facing a stock price storm
Trent is engaged in retailing of apparels, footwear, accessories, toys, games, food, grocery & non-food products through various retail formats/ concepts.
This Tata group company reported strong momentum in its apparel business in Q2 FY26, driven by steady expansion and sustained demand across its fashion formats. Revenue from operations increased 17% year-on-year (YoY) to Rs 4,724 crore, while operating earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 16%.
The company expanded its network to 1,101 stores spread across 251 cities, including two in the UAE, strengthening its reach in both major metros and smaller cities. Like-for-like growth in fashion remained modest. But the newer categories like beauty, innerwear, and footwear, in aggregate, contributed over one-fifth of sales.
Online sales surged 56%, accounting for 6% of Westside’s revenue. Despite muted sentiment and weather-related disruptions, Trent maintained stable margins through technology-led efficiency and selective store consolidation, reinforcing its leadership in affordable fashion retail.
In the past one year, Trent share price has tumbled 33%.
Trent 1 Year Share Price Chart
#2 Nykaa: The clear winner in the premium beauty race
FSN E-commerce Ventures (FSNEV) popularly known as “Nykaa” is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. The company has a diverse portfolio of beauty, personal care, and fashion products, including owned brand products manufactured by it.
FSN E-Commerce Ventures (Nykaa) posted a strong Q2 FY26 performance, led by broad-based growth across beauty and fashion. Gross merchandise value rose 30% YoY to Rs 4,744 crore, marking its best growth in six quarters.
Net Revenue increased 25% to Rs 2,346 crore and EBITDA rose 53% to Rs 159 crore, the highest margin since listing. Fashion vertical GMV increased 37% to Rs 1,180 crore; EBITDA losses contracted to –3.5% in Q2 FY26 from –9% in Q2 FY25.
Nykaa expanded its store count to 265 across 90 cities and launched “Nykaa Now,” offering one- to two-hour deliveries in seven metros. Its owned brands portfolio crossed Rs 2,900 crore in annualised GMV, supported by international launches like Kay Beauty in the UK.
The company is likely to see sustained momentum from premiumization, new brand tie-ups, and deeper regional reach.
In the past one year, FSN E-commerce Ventures share price has rallied 44.3%
FSN E-commerce Ventures 1 Year Share Price Chart
#3 Relaxo: A brand in transition, not in growth
Relaxo Footwears is the largest footwear manufacturing company in India, which deals in non-leather products i.e. rubber/EVA slippers, canvas shoes, sport shoes, sandals, school shoes and other types of footwear. It is also the leader in ‘value’ segment footwear.
It has a portfolio of renowned brands like Relaxo, Sparx, Flite and Bahamas. The company sells its products through retailers served through distributors, retail outlets, exports and e-commerce / modern trade.
Relaxo Footwears reported a decline in revenues in Q2 FY26 as it continued to navigate a slow consumption environment and a major shift in its distribution model. The company said its ongoing transformation from a wholesale-led to a retail- and distributor-driven system had caused temporary volume softness but would improve long-term efficiency and transparency.
Management noted resistance from some channel partners during the rollout of its digital retailer app and distribution management system but maintained that the quality of debtors and inventory discipline had improved markedly.
The company is also focusing on premium footwear to lift average selling prices and margins. With capex of around Rs 100 crore planned for FY26 and growing adoption of its Relaxo Parivaar retail platform, the firm expects demand recovery in rural markets to support gradual top-line growth and stronger profitability.
In the past one year, Relaxo Footwears share price tumbled 38%.
Relaxo Footwears 1 Year Share Price Chart
#4 PVR Inox: A blockbuster quarter, but can it cover
PVR Inox is India’s largest and most premium film exhibition company. PVR pioneered the multiplex revolution in India by establishing the first multiplex cinema in 1997 at New Delhi and continues to lead the market with relentless focus on innovation and operational excellence to democratise bigscreen movie experience.
PVR Inox posted its best quarterly performance in two years during Q2 FY26, led by strong content coupled with increased footfalls across formats. Revenue reached Rs 1,843 crore, up 12% YoY; EBITDA was up to Rs 327 crore and net profit to Rs 127 crore, helped by good performances from Hindi, Hollywood, and regional films.
The company welcomed 44.5 million guests during the quarter, the highest in eight quarters, with occupancies improving to 28.7%. Advertising revenue rose 16% to Rs 126 crore, marking the highest second-quarter level since the pandemic.
PVR INOX added 22 new screens while rationalising eight under its capital-light expansion model and reduced net debt to Rs 619 crore, its lowest since the merger. A strong multi-language release slate and festive calendar are expected to sustain footfall momentum through the second half of FY26.
In the past one year, PVR Inox share price has fallen 25.7%
PVR Inox 1 Year Share Price Chart
Growth
Now let’s take a look how the rise in middle class spending has boosted the sales of these four companies in the past five years.
Sales Growth of Consumer Discretionary Stocks in India
| Sr No | Company Name | 5 Year CAGR Sales Growth |
| 1 | Trent | 37.5% |
| 2 | FSN E-Commerce | 35.1% |
| 3 | Relaxo Footwears | 3.0% |
| 4 | PVR Inox | 11.1% |
Over the past five years, sales of these four companies have changed quiet a lot, showing differences in how each business has developed and how fast they are growing.
Trent and FSN E-Commerce have shown good performance, recording CAGRs of 37.5% and 35.1%, respectively, due to rapid addition of new stores, adding new product lines, and growing through online channels.
Meanwhile, Relaxo Footwears grew at a moderate 3% CAGR. Limited rural demand and restructuring in its distribution network were responsible for slowing down its growth.
PVR INOX had an 11.1% CAGR, showing bounce back from the pandemic and slow but sure return of audiences.
The wide spread in the difference in growth trends show that India’s rising middle-class spending is benefiting quicker-growing and well-known businesses
Valuations
Let’s now take a look at the valuations of these consumer discretionary companies, using the Enterprise Value to EBITDA (EV/EBITDA) multiple as a benchmark.
Valuations of Consumer Discretionary Companies
| Sr No | Company | EV/EBITDA | Respective Industry EV/EBITDA Median | ROCE |
| 1 | Trent | 46.5 | 15.2 | 30.7% |
| 2 | FSN E-Commerce Ventures | 123.3 | 12.9 | 9.6% |
| 3 | Relaxo Footwears | 26.4 | 18.2 | 11.2% |
| 4 | PVR Inox | 9.1 | 16.0 | 2.7% |
It’s clear that the majority of participants in this sector are trading well above their industry averages, indicating the market’s positive outlook on India’s discretionary demand story.
Trent and FSN E-Commerce Ventures maintain high valuations, at 46.5x and 123.3x, in contrast to sector medians of 15.2x and 12.9x, respectively. These valuations show that investors will believe that these companies will keep growing, supported by well-known brands, more stores, and stronger online sales.
Relaxo Footwears is valued higher than its competitors, trading at 26.4x compared to the industry average of 18.2x, because of its steady finances and solid earnings.
On the other hand, PVR INOX is trading significantly lower at 9.1x, compared to the industry median of 16x, as investors remain cautious due to fluctuating audience figures and reliance on film releases.
While sector tailwinds justify higher multiples, it is still very important for investors to determine whether future earnings growth is already factored in.
Conclusion
The consumer discretionary story in India has reached an inflection point. A secular increase in income, urbanization, and digital exposure has fundamentally altered the way the middle class spends, making lifestyle indulgence options a routine affair.
From fashion and beauty to footwear and entertainment, each segment tells the story of aspiration meeting affordability. The companies discussed here show the shift in consumer spending. Some companies are expanding fast, others are improving their supply chains or focusing on experiences that draw families back to stores and theatres.
However, investors need to be careful. The sharp divergence in growth rates and valuations indicates that not all consumption stories are created equal. Premium valuations for apparel and beauty reflect optimism, but they also leave little room for error.
Any investment decisions have to be based on a comprehensive evaluation of business models, balance sheet strength, and sustainability of margins within this evolving discretionary landscape.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to dig deep into the world of companies, studying their performance, and uncovering insights that bring value to her readers.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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