BATA IN­DIA

Flash News Investment - - RECOMMENDATIONS -

{Ticker : 500043 { BUY: ₹979.90 { Tar­get: ₹1105

Bata In­dia is a man­u­fac­turer and re­tailer of footwear. In FY18, the com­pany added 100 Coco stores and 30 fran­chise stores, tak­ing the to­tal store count to 1375 out­lets. For FY19, it plans to add 150 new stores and ex­pand into Tier-II and Tier-III cities go­ing for­ward. In Q1FY19, its rev­enue was up by 8 per cent YoY due to high vol­umes of new prod­uct launches. The EBITDA and PAT grew by 38 per cent and 36.8 per cent, re­spec­tively, due to high rev­enue and op­er­a­tional ef­fi­ciency. It is also fo­cus­ing on brand­ing and has in­creased its ad­ver­tise­ment ex­penses. The re­duc­tion in GST rate on footwear had a pos­i­tive im­pact on the com­pany. The re­cent hike in im­port duty on footwear from 20 per cent to 25 per cent would ben­e­fit com­pa­nies like Bata. Hence, we rec­om­mend it as a BUY.

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