Accumulate Bata India; target of Rs 940: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Bata India

Bata’s Q1FY19 revenue was in line, EBITDA and PAT exceed estimates. We anticipated lower revenue growth for Bata compared to peers based on our recent channel checks. Nevertheless, margin improvement benefiting from implementation of GST, was ahead of our anticipation. Going ahead, we believe that Bata sales growth would remain lower vs peers, mainly due to increased competition, better and economic offerings by peers and persistent execution issues with Bata.

Outlook

In addition, premiumization, cost saving measures and GST rate change (18% to 5% for ` 500 – `1,000) would accelerate profitability. We have upward revised FY19E and FY20E estimates to ` 22.0 and ` 25.1 to factor in Q1 performance and revision in GST rate. Valuing Bata at 38x FY20E EPS to arrive at a TP of ` 940. Maintain Accumulate.

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