Expect Bata India to deliver 20% returns in the long term: Rajat Rajgariha

In a chat with ET Now, Rajat Rajgarhia, Director-Research, Motilal Oswal Securities shares his views on Bata

ET Now: I have been reading some of your wonderful reports, you have got a buy call on Bata that stock has done exceptionally well in last 10 days, why do you like Bata and what is your price target there?

Rajat Rajgarhia: Well the key story for Bata is this whole consumption story which has been gradually spreading from one segment to another and we think that the kind of a retail reach that they have been able to make. Now they are introducing different strategies to target newer audiences and different price categories within the same audiences. So you will see volume growth returning back, profit growth to be quite good and we have seen how companies with good balance sheets, sustained earnings have seen massive re-ratings in their multiples, you are still getting this stock at about 20 times up, 20 times forward so while we have a price target which is a return of 20% plus you should be invested in this name and then play this out throughout this consumption theme. I do not want to set a price targets where investors can sell it out but be into the name or write through the story till the time it continues to play out.