The value retail sector stocks are in focus. According to the latest report by Motilal Oswal report, demand trends in smaller cities, early festive buying and improving rural cash flows have helped value fashion names hold steady. But what are the key stocks to watch in this segment? The brokerage house has reiterated ‘Buy’ rating on V-Mart Retail and Vishal Mega Mart.
Here is a detailed analysis on the investment rationale guiding the top retail sector picks-
Motilal Oswal on retail sector: Festive timing boosts quarterly growth
The brokerage report noted that the shift of the Pujo festival to the second quarter of Financial Year 2026 instead of the third quarter of last year played a major role in lifting sales. It mentioned that “Value fashion retailers sustained their outperformance with strong double-digit revenue and SSSG (same-store sales growth)”, helped by a mix of government measures and better rural income visibility.
Consumption-supportive policies such as Goods and Services Tax (GST) rationalisation, income tax cuts, free food programs, cash support in some states and lower interest rates have contributed to the demand recovery, as per the brokerage report.
Motilal Oswal on retail sector: Stocks picks to watch
Motilal Oswal pointed out that the upcoming quarter may show slower year-on-year growth due to a high base effect. However, the report pointed out that early winter and wedding-related buying can support sales, particularly for retailers with a strong presence in northern India. According to the brokerage report, “the near-term outlook remains constructive.”
Furthermore, the brokerage has given a Buy ratings on V-Mart and Vishal Mega Mart. For V-Mart it has set a target price of Rs 1,085. This implies 37% upside. For Vishal Mega Mart, the brokerage has given a target price of Rs 180, indicating nearly 34% upside.
Motilal Oswal on retail sector: Sector data
As per the brokerage report, the four listed value fashion retailers posted 33% revenue growth in the second quarter of Financial Year 2026. This is driven by a 20% addition in retail area and strong same-store sales growth. It highlighted that “Strong growth momentum and robust cost controls also led to a broad-based expansion in aggregate pre-IND AS EBITDA margins by ~210 basis points year-on-year to 6.4%.”
The report added that “Aggregate adjusted PAT rose sharply year-on-year to Rs 1.6 billion,” reflecting contribution from both higher sales and improved working capital management.
Motilal Oswal on retail sector: Why value retail remains ahead
Motilal Oswal pointed to long-term structural shifts. As per the report, “Value fashion retailers continue to outperform premium and branded apparel retailers, underpinned by structural tailwinds.”