Published on 20/10/2020 10:05:18 AM | Source: Religare Broking Ltd

Buy Bata India Ltd For Target Rs. 1,669 - Religare Broking

Posted in Broking Firm Views - Short Term Report| #Bata India Ltd. #Trading Report #Religare Broking Ltd

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Investment Pick - Bata India Ltd.

* Incorporated in 1931, Bata is the largest retailer and manufacturer of footwear in the country. It has a strong pan-India retail presence with 1,558 stores across cities, including franchisee stores and around ~3.23 mn sq ft retail space. It has production capacity of ~21 mn footwear pairs per annum. Its brands include Bata, Bata Comfit, Footin, Hush Puppies, Marie Claire, Power, Naturalizer, North Star, Patapata, Scholl, Weinbrenner, Disney, Bubblegummers, etc.

* Over the years Bata has been a consistent performer however Q1FY21 was severely impacted due to lockdown led by Covid-19. As the situation is still uncertain we expect FY21 growth to remain muted. Nonetheless we expect the company to regain in FY22E as the situation stabilises and demand would pick-up on the back of better product mix and higher footfalls driven by increasing presence in e-commerce space and tapping new markets, growing distribution network by expanding in semi-rural market and aggressively promoting brands through advertisements. Also company’s efforts towards its loyalty program-‘Bata Club’ will help in revenue generation and adding new clients. Besides, it has healthy balance sheet and strong cash flows which is an added advantage and this would aid to sustain in tough times. Hence we have initiated a Buy on the stock with target price of Rs. 1,669.

Buy Bata India Ltd @ 9-12 Months CMP 1,387.60 TGT 1,669


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