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Nirmal Bang Report
Brokerage firm Nirmal Bang has reiterated its ‘Hold' rating on Bata India and has raised its target price to Rs 772 from earlier Rs 759, implying a potential upside of 6% from the current levels. valuing it at 34 times Jun-28E earnings per share.
Bata India's revenue was up 3.9% YoY to Rs 9,789 million; volume +2.3% with the balance from price/mix.
Average selling prices continued to rise, with premium products outgrowing lower price points. GST rationalisation ~3 quarters ago has helped ease the drag at the lower end, though Bata continues to see stronger growth from premium categories.
EBITDA margin 20.8% (-27bps YoY) held despite A&P +25%; employee cost flat for five quarters on VRS plus Blue Yonder-led productivity. A&P to run at ~3-3.5% of sales (vs ~2.5% LY) and stay elevated for a couple of years.
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