Buy Bata India, says PN Vijay

Buy Bata India with a target price of about Rs 965 in the next twelve months, says PN Vijay, Portfolio Manager.

Vijay told CNBC-TV18, "I recommend the midcap stock Bata India has a buy at the current level of around Rs 870. It is a household name in India and it is in the footwear retailing space. If there is any other stock in the country which is comparable, it is Titan. We cannot really call it an FMCG like HUL because per value is about Rs 1,000 or so whereas a shampoo or a soap cost much less."
He further added, "In the last quarter Bata did not have a very exciting quarter because the Puja and Diwali were delayed by about 15-20 days. So while the sales grew more than 15 percent, the EBITDA margins drop by about 120 bps because there is a lot of selling expenses incurred by the company to take care of the Puja and Diwali seasonal rush. However, I feel that this is only temporary and Bata will show very strong performance in the succeeding quarters because of this somewhat lackluster performance in the last quarter Bata share slipped and it is now well available at Rs 870. I think this is one of the best consumer durable stocks in the country and I would recommend a buy at the current level with a target price of about Rs 965 in the next twelve months." Disclosure: Stock discussed may be present in client and proprietary portfolios.