Accumulate Bata India; target of Rs 1620: Geojit

Geojit recommended accumulate rating on Bata India with a target price of Rs 1620 in its research report dated March 31, 2023.

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March 31, 2023 / 18:31 IST

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26 Aug, 2025 12:21

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Geojit's research report on Bata India

Bata India Ltd. (BIL) is the largest retailer and leading manufacturer of footwear in India, with 2,000+ retail stores as of December 2022. We downgrade to Accumulate rating (from Buy) and revise our target price to Rs.1,620 (from Rs. 2,155), factoring current weak demand. Revenue grew by 7%YoY aided by an improvement in the premium mix. Average selling price (ASP) improved by 13% YoY to Rs.772. Inflationary pressure and an increased GST rate impacted volumes in mass categories, which is likely to improve gradually. Gross margin improved by 210bps YoY to 54.8%YoY, while EBITDA margin improved by 290bps YoY to 22.9% abetted by improved ASP and cost optimization measures. BIL targets ~500 franchisees by 2024 and has already opened 392 across 330 towns. This, along with store renovation, portfolio casualization, and distribution expansion will support volumes. Measures to improve the supply chain and asset light retail expansion, will enhance margins. Given its strong brand recall & reach, we believe, BIL can revive its revenue growth trajectory. We value BIL at 43x on FY25 EPS.

Outlook

The company had paid a special dividend of Rs.50.5 in FY22 apart from the normal dividend of Rs.4 (dividend yield of ~3.8%), which will improve the return ratios going forward. We downgrade to Accumulate rating with a revised target of Rs. 1,620, valuing BIL at 43x on FY25E EPS.

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