BATA India - 'Discover - New' - Microsec

We Re-Initiate Bata India a BUY. We had earlier recommended the stock at the level of INR509 with a Target price of INR670, the target of which had been achieved. As the stock has corrected by 20% from its high and the valuation has cooled-off, we think that Bata India is a good buying opportunity for investment at current level.

Bata India is the largest retailer and leading manufacturer of footwear in India with ~1250 stores and brands like Hush Puppies, Dr Scholls, Weinbrenner, North Star, Power, Marie Claire, Bubblegummers, Ambassador, Comfit and Wind India.

At the CMP of INR790, the stock discounts its CY12E EPS of INR27.2 by 29x and its CY13E EPS of INR33.3 by 23.7x. Its 3 year Average P/E works out to be 29x as per Bloomberg. With Strong Brand Value, Aggressive Expansion of Large Format Stores, Strong Financials and New thrust on Youth, makes Bata india a good bet for investment. We assign a multiple of 29x on its CY13EPS of INR33.3 to arrive at a Target price of INR966 for a time horizon of 12 months.

Source : Equity Bulls

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