Moneycontrol
Get App
Last Updated : Feb 13, 2020 12:49 PM IST | Source: Moneycontrol.com

Hold Bata India; target of Rs 1955: ICICI Direct

ICICI Direct recommended hold rating on Bata India with a target price of Rs 1955 in its research report dated February 07, 2020.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

ICICI Direct's research report on Bata India


Bata reported stable revenue growth of 6.5% YoY to Rs 830 crore despite a challenging market environment. Retail business grew 4% YoY while the wholesale business continued its strong performance with third consecutive quarter of 20%+ revenue growth. Gross margins continued their positive improvement trajectory and expanded 210 bps YoY to 60.7% owing to increased share of premium products. However, owing to negative operating leverage, EBITDA margins expanded 30 bps YoY to 21.3%. Absolute EBITDA grew 8.2% YoY to Rs 177.1 crore. Driven by steady operational performance and lower depreciation expense (down 6% YoY), PBT grew 11.4% YoY to Rs 177.7 crore. Effective tax rate came in higher at 33% vs. our estimate of 25.2%. Hence, PAT came in below our estimate at Rs 117.2 crore (I-direct estimate: Rs 133.1 crore), up 14% YoY.


Outlook


We bake in revenue and PAT CAGR of 11% and 20%, respectively, in FY19-22E. We maintain our target price of Rs 1955 (44.0x FY22E EPS of Rs 44.4). However, we revise our rating from BUY to HOLD as the stock has appreciated by 33% over the last six months.


For all recommendations report, 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.




Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.

First Published on Feb 11, 2020 03:20 pm
Sections
Follow us on