Bata India Ltd (BIL) is the largest footwear retailer in India, offering footwear,
accessories and bags across brands like Bata, Hush Puppies, Naturalizer, Power, etc.
BIL’s ~70% revenue is derived from Men & Kids segment and balance from women’s
segment. BIL has over 1,400 Bata retail stores across India.
Outlook and Valuation: We expect BIL to report net revenue CAGR of ~16% to
~`3,555cr over FY2018-20E mainly due increasing brand consciousness amongst
Indian consumers, new product launches, higher number of stores addition in tier – II
and III cities and focus on women’s segment (high growth segment). Further, on the
bottom-line front, we expect CAGR of ~19% to `311cr over the same period on the
back of margin improvement (increasing premium product sales). Thus, we initiate
coverage on Bata India with BUY recommendation and Target Price of `896.
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