Sharekhan's research repor on Bata India
Bata’s performance is inching close to pre-pre-covid levels with good demand for footwear products in the urban market during the festive season and sustained higher demand in tier-3 and tier-4 towns (business recovered to 50% in Q2FY2021). Mr. Sandip Kataria’s elevation as global CEO provides large opportunities for Bata in export markets, and the company can leverage upon its global expertise/styles to remain competitive in the domestic market. Focus on expanding base in tier-3 and tier-4 towns through the franchise route (200 stores), sustained new product launches/promotional activities, and emphasis on digital footprint (currently contributes ~10% to revenue) bode well for the company from the medium to long-term perspective.
Outlook
We maintain our Buy recommendation on Bata India (Bata) with a revised PT of Rs. 1,765. The stock is currently trading at 46x its FY2023E EPS and 18.4x its FY2023 EV/EBIDTA.
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