Indian retail sector staring at these 6 risks, but 2 smallcaps hold edge: Nuvama
consumer durables retail sector, valued at Rs 1.8 trillion, faces six key risks that could disrupt growth, according to Nuvama Institutional Equities. Despite the challenges, two small-cap players—Electronics Mart India and Aditya Vision Ltd—stand out for their strategic approaches and strong regional dominance, making them compelling investment opportunities.
The Indian consumer electronics sector is poised for growth, projected to reach Rs 3 trillion by FY29, but the path is fraught with challenges. Nuvama’s research highlighted six major risks: a demand slowdown, rising competition, the growing clout of online retail, disruption in financing availability, inadequate OEM after-sales support, and supply chain interruptions.
While these risks threaten profitability across the sector, the brokerage identified two small-cap companies—Electronics Mart India (EMIL) and Aditya Vision Ltd (AVL)—that are better positioned to navigate this volatile landscape. The brokerage initiated coverage on both the firms with a “Buy” rating for each stock.
“Despite being competitors in the same retail segments, EMIL and AVL have pursued divergent—but effective— growth strategies, targeting distinct and non-overlapping markets,” said Nuvama Institutional Equities.
EMIL, headquartered in Telangana, has adopted a scale-focused strategy, targeting large, high-potential markets such as Delhi-NCR. With robust cash flows from its traditional base in Andhra Pradesh and Telangana, EMIL is expanding its store footprint by 25-30 outlets
