Bata India Ltd. share price target

We remain positive on the stock from a long-term perspective given its immense growth potential. Maintain a BUY with an unchanged TP of Rs 2,200/share and assign a PE of 43x FY24E EPS.

Steady growth; full volume and margin recovery awaited

Bata reported in-line revenue print of Rs9.4bn (up 42% on QoQ basis).

We remain positive on the stock from a long-term perspective given its immense growth potential. Maintain BUY with revised TP of Rs 2,200/share and assign a PE of 43x FY24E EPS.

Volume growth slow; margins improve

Q3FY22 revenue grew by 37% YoY (+37%QoQ) on a low base (de-growth of 26% in Q3FY21). With the re-opening of markets we expect the volumes to pick up going forward. Topline has crossed pre-covid level sales for the first time. The distribution reach has now crossed 1,000+ towns in Dec 2021 Vs 892 in 2020. To reach smaller towns, the company opens new stores via franchise route and ensures availability in multi-brand outlets via distribution channels. The total franchisee reached 284 (200+ towns covered) Vs 250 in Q2FY22 and targets to open 500 in smaller towns by 2023. The company had introduced other channels like Bata Chatshop, Bata Store on Wheels...

Mixed set of numbers; Topline reaches pre-Covid levels

It has a robust b/s with healthy cash, bank balance worth | 865+ crore (as on H1FY22), negative working capital cycle and generating RoCE of 23%+ Q3FY22 Results: On the back of strong festive demand and easing of trade restrictions, revenues for Bata has surpassed pre-Covid levels in Q3FY22. On a benign base, reported revenue growth of 37% YoY to | 614.1 crore...