The Indian retail sector is seeing a strong revival as the economy recovers from the COVID-19 pandemic. Despite macroeconomic uncertainties and high inflation, consumer spending accelerated during the ongoing festive season, which began last month.
The sales including both online and offline during the festive period are estimated to reach $27 billion, which is almost double the amount in the same pre-Covid period in 2019, and nearly 25% higher than last year, Reuters reported, quoting industry data.
The spending is also being boosted by credit expansion, which hit a 10-year high of 16.2% in August as firms and consumers took out loans to fund investments and purchases. According to media reports, the total lending market in India stood at ₹174.3 lakh crore in FY22, with the retail segment accounting for 48.9% of it.
As per the recent survey by Deloitte, during the period between July and August, Indian consumers are seen actively spending 36% on cable TV, 36% on clothing and footwear, 33% on electronics, 25% on furnishings, 22% on restaurants and 12% on alcohol.
Major retail stocks have delivered triple-digit returns in the last one year, with Mirza International at the top of the list. Shares of Mirza International have delivered mind-boggling returns to their shareholders when markets are in a volatile trend. The stock reached its all-time high of Rs. 375.6 on September 12, 2022.
Since the start of the year, the stock has risen from levels of ₹125.85 to ₹348.45, resulting in a multi-bagger return of 176.87%, and in the last one-year it delivered a return of 448%. From its 52-week low of ₹58.4, the stock has gained nearly 498%.
Mirza International is a small-cap footwear stock with a market capitalization of ₹4,196 crore. The company is into the manufacturing of finished leather, shoe uppers, shoes, and leather accessories. About 85% of the shoes manufactured by the company are exported. It has commenced the sale of footwear under its own brands, Red Tape and Oakridge, and these have received an encouraging response.
In Q1FY23, the company's consolidated net profit grew almost 4-fold to ₹40 crore as against ₹11.6 crore in the corresponding quarter last year. Further, FIIs have turned bullish on the stock. From 1.7% in the September 2021 quarter, they increased their stake to 3.4% in the June 2022 quarter.
Shares of Shoppers Stop have surged 142% so far in 2022. The stock gained 71% in the last six months to Rs. 800, from Rs. 469. The stock has more than doubled investors' wealth in the last year, increasing 186.23%. The stock has risen by 91% since June. The share price of this fashion retailer rose 196.27% from its 52-week low of Rs. 270.6.
The rally in the stock was supported by the consistent improvement in operating performance with a revival in the retail sector, repeat sales from first citizen loyalty customers, increasing contribution from private labels, higher sales from the beauty segment, and traction in the omnichannel, an analyst at BNP Paribas said.
Similarly, shares of Lehar Footwear have risen from ₹34.40 to ₹95.70 levels, generating a multi-bagger return of 178% in the past one year. So far in 2022, the stock rewarded 96% returns to their shareholders.
Lehar Footwear has an annual installed capacity of 75 Lakh pairs of Hawai Chappals, 12 Lakh pairs of canvas shoes, and 9.87 Lac pairs of EVA-injected footwear. The company manufactures a variety of footwear like lightweight fancy slippers, PVC and TPR footwear, and synthetic leather chappals, in addition to Hawai Chappals and canvas shoes, according to Trendlyne.
Shares of Osia Hyper Retail Ltd. jumped 53.28% in just three months to touch a 52-week high of ₹340 on September 13, 2022. The stock has been increasing since the beginning of 2022, rising from ₹150 levels to ₹314.05, representing a return of 109 percent.
In the last one year, the stock has surged from ₹136.25 to current levels of ₹314.15, ascending to the tune of nearly 130.88 per cent in this period.
|Scrip Name||% One year- Return|
|Osia Hyper Retail Ltd||130|
Liberty Shoes, another footwear stock, reached an all-time high of ₹442 on October 14, 2022, but the stock has seen some profit booking as a result, it fell 16% in the last three trading sessions.
The stock has been increasing since the beginning of 2022, rising from ₹154.85 to the current level of ₹356.90, generating a return of almost 130 percent.
After hitting ₹127.70 in mid-June, which is very close to its 52-week low of ₹124, the stock began gradually rising, and it has since risen 180%. During the last one year, the stock gave a multi-bagger return of 107% at a time when the Nifty has given a return of 3.40%.
After reporting its June quarter earnings on August 10, the stock gained more traction. The company posted a net profit of ₹5.47 crore against a net loss of ₹3.06 crore in the same quarter of the last fiscal.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.