Geojit BNP Paribas's research report on BataBIL looks as an attractive investment opportunity considering the 32% erosion in market cap from the last 2yr high.Drop in BIL‟s valuation is consequent to -16% de-growth in PAT during the same period (FY14-16E). We foresee significant shifts in strategy including ERP & manufacturing up-gradation to bring efficiencies. We do not expect any further reduction in number of retail stores which was consolidated through closure & relocation in last 2yrs.Revenue & earnings to grow at 12.5% & 18.6% CAGR respectively in FY16E-18E with strong 12%CAGR in revenue per store. EBITDA margin is likely to be lower at 11.4% in FY16E, but post which we factor 180bps improvement to 13.2% in FY16E-18E. We initiate with an “Accumulate” rating valuing at 30x FY18E EPS with a target price of Rs 556.BIL is currently trading at an attractive one year forward P/E of 32.7x, 9% discount to last 5yr average and 20% discount to 3yr average. We value BIL on 30x FY18E EPS with a target price of Rs556 and recommend Accumulate. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
