Bata India - All the right steps - Motilal Oswal

Expect strong earnings and growth visibility

- Restructuring leads to sales CAGR of 14.7% over CY05-12, with EBITDA and PAT growth of 47.6% and 51.6%.

- Focus on aggressive growth by expanding presence in Tier II, III cities and rural India.

- Outsourcing, K Stores expansion to contain employee cost; Margins set to increase.

- Bata India (BATAIN) trades at a PE of 26.4x/20.8x/16.5x CY13E/14E/15E EPS. We value the stock at 25x CY14E EPS and arrive at a target price of INR975, with a Buy rating.

Source : Equity Bulls

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