New Delhi, Sep 1 India's Rs 18,000-crore luggage industry is projected to grow 5-7 per cent in FY26, an increase from a 3 per cent CAGR over the past three years, a report said on Monday.
The robust growth is owed to rising leisure and corporate travel and increased demand for hard luggage, according to a report by Crisil Ratings.
Within this segment, new-age manufacturers will capture 25 per cent market share after growing approximately 20 per cent, outbeating larger legacy ones, who will grow in single digits, according to the rating agency.
The growth this fiscal will be driven by the organised segment, which enjoys a 45 per cent market share, the report added.
New-age manufacturers will increase their share to 25 per cent of the market due to fast-moving, contemporary and stylish designs across segments catering to the aspirational class, and e-commerce expansion.
Further, analysts said that low-cost private label-based production, controlled overheads and wider reach through distribution across e-commerce will aid new-age luggage makers.
"We see new-age makers increasing their market share to 25 per cent in the organised segment this fiscal – doubling over the last two fiscals, even as legacy players continue to invest in online channels to augment their offline market presence,” said Rahul Guha, Senior Director, Crisil Ratings.
Operating margins will improve 150-200 basis points (bps) to 9.5-10.0 per cent this fiscal year, backed by rationalisation of raw material prices and liquidation of lower-margin inventory with the legacy manufacturers.
Margins of large players had declined by more than a third year-on-year to 8 per cent last fiscal because of significant pricing pressure from new-age rivals.
Besides durability, urban consumers focus on aesthetics, design and utility, while the rural ones are slowly shifting from traditional soft to the more aspirational hard luggage, the report noted.
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