Discover: The 5-Minute Blueprint for Becoming a ONE STOCK CROREPATI
As the demand for retail is closely linked to the economy, retail stocks are usually riskier - their fortunes are prone to economic booms and busts. For this reason, they are often called cyclical stocks. Generally considered an offensive tactic in investing, cyclical stocks can be used to generate high returns when the economy is doing well.
Therefore, the best time to buy such stocks (retail stocks) is at the start of an economic expansion and the best time to sell them is just before the economy begins to slow down.
The details of listed retail companies can be found on the NSE and BSE website. However, the overload of financial information on these websites can be overwhelming.
For a more direct and concise view of this information, you can check out our list of retail stocks.
Titan and V Mart Retail were the top retail performers over the last 5 years in terms of sales and profit growth.
Titan's growth can be attributed to the company's leadership position in the organized jewellery, watches and eyewear segments, supported by its strong brands, wide distribution and service networks and diversified product portfolio in terms of price points and styles. Titan is a part of the TATA Group of companies, which lends it strong financial flexibility while also supporting its brand equity and customer acceptance of new product launches.
V Mart Retail has also done well on the back of its diversified product portfolio across various segments along with its wide geographic presence with most of its stores in tier-II and tier-III cities. The company also has an established relationship with a wide vendor base, which optimizes cost mix and a strong financial profile with absence of any term loans and strong debt protection metrics.
To know which other companies performed well over the last 5 years, check out our entire list of top performers.
There is no consistent trend of dividends across the industry, with different companies having different dividend policies.
For more details, check out our list of top retail stocks offering high dividend yields.
Return on capital employed (ROCE) is a financial ratio that can be used in assessing a company's profitability and capital efficiency by determining how well the management is able to allocate capital for future growth. An RoCE of above 15% is considered decent for companies that are in an expansionary phase.
Titan and V Mart Retail are the top retail stocks right now on the Return on Capital Employed (RoCE) parameter.
To know which other retail stocks offer great return on capital employed, you can check out the top retail stocks offering the best RoCE here.
Investing in stocks requires careful analysis of financial data to find out a company's true worth. However, an easier way to find out about a company's performance is to look at its financial ratios.
Two commonly used financial ratios used in the valuation of retail stocks are -
Price to Earnings Ratio (P/E) - It compares the company's stock price with its earnings per share. The higher the P/E ratio, the more expensive the stock.
To find stocks with favorable P/E Ratios, check out our list of retail stocks according to their P/E Ratios
Debt to Equity Ratio (D/E) - It compares the company's debt to the shareholder's equity. A debt to equity ratio less than 1 indicates that the portion of assets provided by shareholders is greater than the portion of assets provided by creditors and vice versa.
Retail stocks, given high the cash flow volatility, tend to be extremely risky if they have a high debt to equity ratio. So, a low debt to equity ratio is a key criterion for buying a retail stock.
To find stocks with D/E Ratios below 1, check out our list of retail stocks according to their D/E Ratios
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Here's an analysis of the annual report of TITAN for 2021-22. It includes a full income statement, balance sheet and cash flow analysis of TITAN. Also includes updates on the valuation of TITAN.
Here's an analysis of the annual report of TRENT for 2021-22. It includes a full income statement, balance sheet and cash flow analysis of TRENT. Also includes updates on the valuation of TRENT.
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