How Big Is Amazon's India Opportunity?

In a report published Tuesday, RBC Capital Markets analyst Mark Mahaney examined Amazon.com, Inc.'s (NASDAQ: AMZN) India opportunity.

According to Mahaney's analysis of the Indian Online Retail sector, the country has become a "significant" market focus for Amazon, given the company's recent $2 billion investment in the country. The analyst added that Amazon's "relatively sizeable" presence makes it well positioned as the market has the potential to reach $18 billion by 2018.

Mahaney also noted that Amazon is "reasonably well positioned" in India from a competitive point of view and should be able to generate "material contributions" within five to 10 years.

Separately, Mahaney stated that Amazon's AWS segment remains a sector price leader (i.e., lowest prices) and that Amazon's Retail Segment (its core business, excluding AWS) has the potential to generate $22 to $38 in annual earnings per share power within 10 years.

Shares are Outperform rated with a $410 price target, however a Sum Of Parts analysis valuing all three segments (North American Retail, International Retail and AWS) separately yields a "broad potential" valuation range of $350 to $660 per share.