Dolat Capital recommended accumulate rating on Bata India with a target price of Rs 1415 in its research report dated August 02, 2019.
Dolat Capital's research report on Bata India
Bata’s Q1FY20 financial performance was in line our estimates. Despite slowdown in most of the consumer categories, the company was able to post strong growth due to new campaigns and attractive product launches during the quarter. The e-com business posted double digit growth, which was encouraging considering its moderate performance in Q4FY19. The retail channel continues to grow steadily aided by premiumization. We have broadly maintained our FY20E and FY21E EPS estimates at ` 27.8 and ` 31.1, respectively.
Outlook
We value Bata at 45x FY21E EPS to arrive at a TP of ` 1,415. We believe that the company has a high growth potential, especially after the recent changes in the stores and strong new brand campaigns. Therefore, the high valuations for the stock is justified. Maintain Accumulate.
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