Bata India Ltd. share price target

Bata has constantly undertaken efforts towards transforming its brand image from a mass brand to a premium one through launch of new trendy collections, investing in marketing spends and redesigning existing store models. Recently, the company inaugurated its fifth experience centre store, with the aim of providing complete foot-care services like 360 foot scanning, customised insoles, medicated pedicure and shoe laundry. The store also offers a wide assortment of fashion and working women styles, premium collections and a sneaker studio. Enhanced share of...

Premiumization and SSSG Growth - The Usual Theme Working Wonders: Bata posted a strong set of numbers in Q1FY20 reporting an increase in its net profit by 22.5% to Rs. 1009.7 Mn in Q1FY20 as against Rs. 824.1 Mn YoY.

Bata has a robust distribution network having ~1420 stores, including ~150 franchisee stores. The company has charted out aggressive store expansion plans mainly in Tier II/Tier III cities. In a bid to enhance the market share in smaller towns, the management intends to open ~ 500 franchisee stores in the next five years. Asset light expansion model is expected to further...

Bata posted a strong Q1FY20 beating our and street estimates. Net Sales at INR 883 cr were up 11% YoY and in line with estimates.

View: Steady growth in retail channel; Maintain Accumulate Bata's Q1FY20 financial performance was in line our estimates. Despite slowdown in most of the consumer categories, the company was able to post strong growth due to new campaigns and attractive product launches during the quarter. The e-com business posted double digit growth, which was encouraging considering its moderate performance in Q4FY19. The retail channel continues to grow steadily aided by premiumization. We have broadly maintained our FY20E and FY21E EPS estimates at ` 27.9 and...

Bata India Ltd (BIL) is the largest retailer and leading manufacturer of footwear in India with ~1300 retail stores as on March 2019. Q4FY19 revenue growth was moderate at 7%YoY impacted by weak performance of E-com channel due to legislation change and one-off institutional order in YoY quarter. EBITDA margin improved by 90bps YoY largely due to expansion in gross margin (120bps YoY) on account of increasing mix of premium products. PAT growth was strong at 69%YoY. Rent expense as % of sales moderately increased by 10bps YoY....

Premiumisation of product portfolio drives growth in FY19 FY19 was an eventful year for Bata with various initiatives undertaken such as sustained efforts towards enhancing share of premiumised product portfolio, refurbishing and redesigning existing store models and enhanced focus on categories like women, youth and sports. In conjunction with the launch of new collections, Bata has increased its investments in branding and advertising by 50-60% over the last two years (3% as a percentage to revenue). Efforts were visible with Bata reporting healthy revenue growth of...

Bata posted weak Q4 performance at the both revenue and the EBITDA level; the revenue and the EBITDA for the quarter grew by 7% and 15% respectively.

View: Double digit growth in Retail channel; Maintain Accumulate Bata's Q4FY19 revenues and EBITDA were below our estimates, but APAT was in line. The lower revenue growth in the quarter was due to the belownormal performance in the e-commerce channel and a one-off institutional order in base quarter. However, the retail channel grew in double digits. We have broadly maintained our FY20E and FY21E EPS estimates at ` 27.9 and ` 31.1, respectively. We value Bata at 45x FY21E EPS to arrive at a TP of ` 1,415. We believe that the company has a high growth potential, especially after the recent changes at the stores and strong new brand...

Bata India Ltd (BIL) is the largest retailer and leading manufacturer of footwear in India with ~1300 retail stores as on Dec 2018. BIL reported strong earnings growth of 51%YoY and revenue growth of 16%YoY. EBITDA margin expanded 450bps to 21% . EBITDA margin expansion was aided by improvement in gross margin on account of increase in premium brands in the mix. Rent expense as % of sales declined by 60bps YoY. Store additions via franchisee route will control fixed costs ....