Religare's research report on BataBATA posted strong Q3FY16 results with net sales/EBITDA/adj. PAT growth of 15%/30.4%/27.5% YoY as SSS grew by an estimated ~11-12% YoY off a favourable base. EBITDA margins at 12.9% beat estimates (RCMLe 11.5%) due to lower operating costs. With management’s sharpened focus on enhancing Bata’s e-commerce platform to cater to a larger customer base, we build in a 15% topline CAGR over FY15-FY18E. Maintain BUY with a Mar’17 TP of Rs 630 (rolled over from a Sep’16 TP of Rs 680).We pare our FY16/FY17/FY18 earnings by 9%/2.8%/0.2% to build in lower margins than estimated earlier, but maintain BUY on the stock as valuations at 25x/19x FY17/FY18 earnings remain attractive. We also roll over to a Mar’17 TP of Rs 630 (from a Sep’16 TP of Rs 680). 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.
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