Bata India Q3 Results Review - Subdued Performance; Maintain 'Hold': Axis Securities

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.Bata India Ltd.’s result was below our/street estimates across all parameters. Bata India's revenue grew by a marginal 0.4% YoY (versus our estimate of 10% YoY) due to muted performance in the mass end of the portfolio. However, the premium portfolio continued to remain strong. Gross margin was up by 127 basis points to 56.1%, improved on account of a better channel mix, prudent discounts, and efficient inventory management. Ebitda margin stood at 20.2% (down by 272 bps YoY) due to higher ad-spends and costs associated with enterprise resource planning implementation. Reported profit after tax at Rs 58 crore was down by 30% YoY mainly due to higher depreciation..Outlook: We remain positive on the long-term outlook of the company as its investment in back end processes will drive overall efficiency, and its efforts on premiumisation and casualisation strategy through fast-growing sneakers and franchise-led expansion in tier three-five towns will bear fruits in the longer run. The company’s focus on prudent expansion of the retail network and marketing investment is further aiding the positive outlook. However, the company is facing short\u0002term challenges such as: A large part of the mass portfolio is still under pressure, and The management’s continued investments in strengthening systems and processes technology adoption will impact the margins in the short term. Hence, we have maintained our wait-and-watch approach on the company and maintain our 'Hold' rating on the stock.Valuation and Recommendation: We expect Bata’s Sales/Ebitda/ profit after tax to grow at 8%/10%/14% compound annual growth rate over FY23-26E and maintain a 'Hold' rating on the stock with a revised target price of Rs 1520/share. We value the company at 43 times December- 25 earning per share..Click on the attachment to read the full report:.Nykaa Q3 Results Review: Analysts Cut Ebitda Estimates As Ad Income Fell; Fashion, B2B Shine.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Bata India Q3 Results Review - Subdued Performance; Maintain 'Hold': Axis Securities

Bata has renewed its focus on hush puppies and has guided aggressive renovation in the coming quarters.

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Bata India Q3 Results Review - Subdued Performance; Maintain 'Hold': Axis Securities

Bata has renewed its focus on hush puppies and has guided aggressive renovation in the coming quarters.

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