Bata India Ltd. share price target

Q3 above estimates: Reported sales grew 5%; we estimate 10% comparable sales growth after adjusting for GST. EBTIDA grew 33% (EBITDA margin improved 330 bps to 16.5%) supported by change in mix towards higher ASP products. PAT growth moderated to 15% due to lower other income.

ICICI Securities Ltd | Retail Equity Research Revenues for the quarter grew 6.2% YoY to | 674.0 crore (I-direct estimate: | 708.1 crore). Post GST implementation, excise duty was subsumed in GST and was not a part of revenue. Hence, revenues are not directly comparable on a YoY basis On account of higher proportion of value added products in the revenue mix, gross margins for the quarter improved 155 bps YoY to 55.1%. Furthermore, controlled operational cost structure and...

Hiccups in wholesale business: The transition to GST has had an industry-wide impact, with destocking at the wholesale level. BATA too witnessed subdued offtake in 1HFY18 on account of non-compliant wholesalers, which resulted in a ~12% YoY decline in wholesale business in 1HFY18. However, the retail business grew ~9% YoY and since retail contributes over 80% of overall revenue, BATA managed to post an overall growth of 6% YoY in 1HFY18. Growth was also aided by an early festive season. With GST netted off from the topline, we expect similar growth of 6% YoY in 2HFY18....

Margins Stable; Renewed Bets on Ladies, Children and Premium Branded Footwear to Boost Top line: During Q2FY18, Revenue from operations was up by 0.5% YoY at Rs. 5869 Mn YoY as compared to Rs.5837 Mn. EBITDA grew 33.3% YoY with operating margin increasingat 11% QoQ and 6.4% on YoY basis. Net profit in Q2FY18 grew by 24.0% YoY to Rs. 429 Mn from Rs. 346 Mn.

A strong brand coupled with improving macro environment in a category dominated by unorganized will help Bata improve sales growth in the new GST era. Strategic changes like focus on franchisee model, improving product offering, and increasing appeal to women and youth will help achieve 12% sales

Bata India reported a mixed set of Q2FY18 numbers wherein revenues were below our estimates while profitability was above our estimates. Revenues for the quarter grew marginally by 1.5% YoY to | 586.9 crore (I-direct estimate: | 614.3 crore). Bata's wholesale business (~15% of total sales) continued to remain under pressure owing to GST transition. Revenues from the wholesale channel declined ~10% YoY dragging overall revenue growth. Retail segment revenues grew 2% YoY. Post GST implementation,...

In line results: Sales grew 11% YoY driven by 10% SSSg and 40 new store openings. Gross margin improved 90 bps YoY, but higher rent and other operating expenses restricted EBITDA margin expansion to only 14 bps YoY at 13%. PAT grew 20% due to lower depreciation.

Bata reported healthy double digit revenue growth of 11% YoY to | 736.1 crore (I-direct estimate: | 727.8 crore), which is its highest quarterly sales. The company's focus on the lifestyle segment and improved visual merchandising resulted in like to like (LTL) sales growth of 10%. Bata added 40 new stores this quarter. Revenues from retail channels grew 15% YoY On account of higher proportion of value added products in the product mix, gross margins improved 80 bps YoY to 52.3%....

ICICI Securities Ltd | Retail Equity Research At the company's 84th annual general meeting (AGM), the management discussed various long term prospects. Bata plans to add 100 new company owned-company controlled (COCO) stores and around ~ 50 new franchisee outlets. The COCO stores are expected to open in malls and high street locations while the company will expand its presence in Tier II and Tier III cities via the franchisee route. Bata is planning to increase the share of women's footwear from existing 26% to 35% over...

End-of-Season Discounts & Renewed focus on each segment with Youthconnect contributed to Topline growth: Bata offered various end-of-season discounts to increase footfalls. Bata is focusing on catering to the youth, womenand kids along with brand extensions in the accessories segment. The segment has huge potential with about 18% of Indias population below 10 years of age.