“India’s retail tiger is roaring back—stocks in this segment are up by as much as 50 per cent in CY17, compared to a 30 per cent return delivered by the Nifty—and is ready to take a big leap. Favourable macros, such as improving consumer sentiments, rising disposable incomes, urbanisation and lower penetration of organised retail are envisaged to primarily fuel this boom,” said Abneesh Roy, senior vice president at Edelweiss Securities.
He added that recent structural reforms such as demonetisation and GST have been potent catalysts. “Also, after some fiercely fought turf wars, offline and online players seem to have made their peace and are toying with the idea of omni‐channel platforms in their quest for success,” Roy said.
“On the valuation front, at 20x FY20E average EV/EBITDA, the stocks appear expensive in conventional terms. However, we argue that valuations will get richer still, fuelled by high growth rates (18‐20 per cent revenue CAGR over FY17‐20), improving return ratios (>750bps RoCE jump over FY17‐20) and expanding opportunity ($266 billion by FY25 from $55 billion in FY16),” he said.
Factoring in prime business models, earnings growth, potential improvement in return ratios as well as perceived risk as touch stone of success, it preferred hypermarkets and jewellery players (market share gain from unorganised).
 "Retail revenues to grow at 13% a year, hit $166 bn by FY25: Edelweiss")