Mumbai: While demonetisation led to a significant dip in consumer demand, the shares of listed retail firms saw one of their best performance on the bourses gaining as much as 300 per cent in 2017 as against the 30 per cent return generated by Nifty.
According to experts, market participants had placed higher confidence in the retail sector as the push towards a digital economy coupled with GST is expected to help organised retailers increase their market share in coming days.
The shares of Future Retail have gained 308 per cent while the shares of Avenue Supermart and V-Mart has jumped 294 per cent and 219.94 per cent respectively.
According to Edelweiss Securities, favourable macros like improving consumer sentiments, rising disposable income, urbanisation and lower penetration of organised retail are envisaged to primarily fuel a boom in the retail sector. The organised retail sector, which was estimated to be around $55 billion in FY16 is expected to reach $166 billion by FY2025.
“GST is expected to accelerate demand shift to the organised segment as unorganised retailers cede turf due to stringent compliance requirements. Post demonetisation, we anticipate consumers to stay hooked to retail. Among categories, we estimate F&B, followed by jewellery and apparels to benefit the most from changing consumer habits, huge unorganised market, low penetration, minimal competition and high entry barriers,” Edelweiss said.