Bata India Ltd. share price target

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.

Bata India’s (Bata) Q1FY17 revenues were below our estimate and remained flattish with a marginal decline of 1% to | 674.7 crore (Idirect estimate: | 734.7 crore). The revenue growth has been impacted owing to high level of competition and discounting by online players in the footwear segment • On the EBITDA front, the company reported a decline of 5% YoY to | 82.1 crore (I-direct estimate: | 98 crore), on account of a 50 bps decline in EBITDA margin to 12.2% (I-direct estimate 13.3%). Though gross margins have improved 170 bps YoY to 50.1%, EBITDA margins declined on account of other expense to sales ratio increasing from 13.6% in Q1FY16 to 15.75% in Q1FY17 • PAT declined 45% YoY to | 50.5 crore(I-direct estimate: | 57 crore). PAT was lower due to exceptional income of | 43 crore in Q1FY16. Excluding it, YoY PAT growth was 2%.ICICI Securities Limited maintain our HOLD recommendation on the stock with a target price of | 575 (based on 30.0x FY18E EPS of | 19.2).

Trendlyne has 8 reports on BATAINDIA updated in the last year from 4 brokers with an average target of Rs 619.5. Brokers have a rating for BATAINDIA with 1 downgrade,2 price downgrades and 1 price upgrade in past 6 months.

During FY16, the net sales of the company have increased by 10%. Footwear and accessories sales increased by 11%. Surplus proper accessories sales increased by 24%. The company's focus in providing Bata Shoes with comfort and style at an affordable price is helping it to consolidate its position amongst the emerging middle class consumers.

Firming up e-commerce business: BIL is strengthening its e-commerce business to reach more consumer base by launching exclusive online portfolio, which will help in enhancing its online presence and also set up uniqueness...

EBITDA for the quarter grew 18% YoY to | 55.4 crore, driven by 60 bps growth in operating margin to 10.2%. The operating margin growth mainly was due to a lower base in Q5CY15, which was on...

Bata is all set to capture the Indian markets with its diverse, large and durable merchandise range catering to every individual. Having a capacity of over 1400 stores pan India, Bata is still looking to expand further with a plan to launch over 100 stores in the coming years with a keen attention to the Tier 3 and Tier 4 markets which can facilitate huge volume growth.

We met BATA's Director-Finance and CFO, Mr Ram Kumar Gupta, and came away enthused by the developments in the company. We are upgrading our revenue estimates by 2%/7%/11% for FY16/FY17/FY18,...

A 149 bps expansion in EBIDTA margin to 12.9 % v/s 11.4 % YoY: BIL's EBITDA margin expanded by 149 bps YoY to 12.9% as against 11.4% in 3QFY16. EBITD A for 3QFY16 stood at Rs. 798 mn v/s Rs. 614 mn in 3QFY16 a...