Bata India Ltd. share price target

We believe that effective implementation of these initiatives coupled with improving macro environment in a category dominated by unorganized will improve the sales growth.We estimate 20% EPS CAGR over FY17-20E. Maintain BUY with TP of Rs 580 based on fwd P/E of 29x.

Store Expansion, Improved Promotion, Youth Focus to TakeBata Forward: Demonetization slowed the business but Leadership position cushioned the impact well: Bata's revenue for the quarter came in at Rs. 6408 Mn, registeringa 9.8% QoQ and 3.8% YoY increase even with the demonetization creating a pressure on the footwear industry. But EBITDA for the quarter fell by 1.3% YoY toRs. 595 Mn with EBITDA margin for the quarter stood at 9.3% falling by 47 bps YoY. This margin contraction was led by 60.8% and 55.1% YoY increase in cost ofmaterial consumed and purchase of stock in trade respectively. PAT for the quarter came in at Rs. 377 Mn, YoY decline of 15.4%.

Bata India Ltd. (BIL) reported 3QFY17 result with revenue growth of 2.5% YoY to Rs 6.4 bn and EBITDA degrew by 3.1% YoY to Rs.757 mn on account of higher rent cost and other expenses. Reported PAT decreased by ~15.9% YoY to Rs. 377 mn vs Rs.448 mn. Revenue grew by 2.5% YoY: BIL's topline increased by 2.5% YoY to Rs.6.4 bn vs 6.1 bn due to weaker consumer sentiments. We expect the company to grow at a CAGR of ~6% over FY16-19e backed by better realization of premium brands like Hush Puppies, volume growth, strengthening e-commerce business...

Sales grew 2.4% YoY as greater presence in direct retail channel helped mitigate the impact of demonetization on the wholesale channel.Gross margin improved 120bps but EBITDA margin declined 70bps as negative operating leverage kicked in. EBITDA declined 3% YoY. Adjusted PAT grew 17% due to lower de..

Revenue grew by 9.73% to Rs. 640.19 Cr in Q3FY17 when compared to the previous quarter. Also, it grew by 2.42% when compared with Q3FY16.

Bata India's Q3FY17 results were above our estimates on the revenue and EBITDA front. However, on account of exceptional item (VRS expense), PAT came in below our estimate. Revenues witnessed decent growth of 2.5% YoY to | 640.8 crore marginally above our estimate of | 630.1 crore Higher employee expense, up 8% YoY to | 65.8 crore, and higher rent expense, up 5.5% YoY to | 89.9 crore, led to a decline in operating margins by 70 bps YoY to 11.8% vs. estimated 11.6%....

For Q2FY17, Bata India reported a ~ 36.1% fall in net profit to ~ Rs. 345Mn as against a net profit of ~ Rs. 540 Mn in the year-ago period before exceptional items. However, its revenues increased by ~ 1.5% to Rs. 5837 Mn from Rs. 5753 Mn YoY. Nevertheless, better operating profit performance, robust other income growth and a decline in depreciation costs boosted pre-tax and one-time earnings. On half year basis, revenues have seen flat growth by 0.2% YoY to reach ~ Rs. 12584 Mn. EBITDA margins for half year have shown an increase of ~ 610 bps YoY due to better product mix.

ICICI Securities Ltd | Retail Equity Research Bata India reported a disappointing set of Q2FY17 numbers wherein the results came in below our estimates on both revenue and profitability fronts. Revenues witnessed flattish growth of 1.5% YoY to | 583.4 crore, below our estimate of | 610 crore. High level of...

Mixed results: Net sales grew 1.5%, below our estimate of 5%. However,good cost control (closing unprofitable stores) led to EBITDA and adj. PAT growing 11% and 53% (above our estimate of 10% and 20%). Gross margin remained flat YoY.

Results below estimates: Revenue declined 1.5% YoY to INR6.7b (our estimate: INR7.8b). EBITDA margin was flat at 12.2% (our estimate: 13.7%). Gross margin expanded 210bp YoY to 50.1%, but the gains were partly offset by increase of 190bp in other expenses. EBITDA declined 1.7% YoY to INR820m, but adjusted PAT grew 6.3% YoY to INR503m (our estimate: INR627m) due to lower depreciation (INR162m v/s INR194m) and higher other income (INR110m v/s INR78m).Motilal Oswal value the stock at INR446 (30x FY18E EPS), implying 19% downside. They downgrade stock rating to Sell.