ICICI Direct is bullish on Bata India has recommended buy rating on the stock with a target price of Rs 1585 in its research report dated August 05, 2019.
ICICI Direct's research report on Bata India
Bata reported healthy revenue growth of 10.6% YoY to Rs 882.1 crore driven by SSSG of 6.5%. Initiatives such as enhanced focus on categories like women & youth, refurbishing and redesigning existing store models and higher ad-spends have yielded positive results. Gross profit continued to witness improvement, with gross margins expanding 140 bps YoY to 54.7%. Constant efforts towards premiumisation of product portfolio have translated into better margins. The management is aiming to enhance the share of premium products by ~ 500 bps in the next two to three years (from current ~50%). Led by strong operational performance, adjusted PAT (excluding Ind-AS 116 impact) grew 24.3% YoY to Rs 102.7 crore.
We are yet to incorporate impact of Ind-AS 116 in our estimates. We have a BUY rating on the stock with a revised target price of Rs 1585 (42.0x FY21E EPS of Rs 37.8).
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