Buy Bata India. target price Rs 1,800: Angel Broking

Angel Broking has given a buy rating to Bata India at a target price of Rs 1,800 an upside of 66.8 per cent from a CMP of Rs 1,079. The company share price moved up by 2.02 per cent from its previous close of Rs 1079.90. The stock last traded at Rs 1101.7 Incorporated in 1931, Bata India is a largecap company with a market cap of Rs 13868.76 crore.

Investment Rationale

The brokerage expects Bata India to report net revenue CAGR of ~11 per cent to ~Rs 3,974 crore over FY2019-22E mainly due to increasing brand consciousness among Indian consumers, new product launches, higher number of store additions in tier II/ III cities and focus on high growth women’s segment.


On the bottom-line front, a CAGR of ~20 per cent to Rs 562 cr is expected over the same period on the back of margin improvement (increasing premium product sales).

Financials

Bata India's key products/revenue segments include footwear which contributed Rs 2926.40 crore to sales value (99.93 per cent of total sales) and Other Operating Revenue which contributed Rs 2.04 crore to sales value (0.06 per cent of total sales)for the year ending March 31, 2019. For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 830.82 crore, up 15.08 per cent from last quarter sales of Rs 721.96 crore and up 6.54 per cent from last year same quarter sales of Rs 779.79 crore. The company reported net profit after tax of Rs 118.27 crore in latest quarter.