Sharekhan's research report on Bata India
Bata India’s (Bata) Q3FY2021 business recovered to ~74% of pre-COVID levels, better than a 50% revival in Q2FY2021. Higher festive sales and target customer outreach led to a 67% growth q-o-q. Gross margins stood at 51.5% versus 61% in Q3FY20 affected by an unfavourable mix as formals and fashion categories yet to revive. OPM stood at 19% versus 4.9% in Q2FY21. Receding COVID-19 cases, improvement in market sentiments and likely improvement in mobility with opening up of commercial economy/education institutions would help business get to pre-COVID level in 5-6 months.
We maintain a Buy on Bata India (Bata) with a revised PT of Rs. 1,765. Stock is currently trading at 47x its FY2023E EPS and 18.6x its FY2023 EV/EBIDTA.
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