BATAINDIA - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.5

Here’s an insightful deep dive into Bata India’s financial health, valuation outlook, strategic edge, and guidance for long-term investors

🧾 Core Financial Performance

EPS: ₹25.7 — moderate earnings base, though not strong enough to justify current valuation multiples.

Quarterly PAT Decline: ₹45.9 Cr vs ₹66.0 Cr (–27.9%) — sharp drop, indicating margin compression or cost headwinds.

ROE: 15.6% and ROCE: 15.1% — decent, but not exceptional; reflects stable capital efficiency.

Debt-to-Equity: 0.92 — relatively high for a retail play, but still manageable.

Dividend Yield: 1.59% — modest, useful for passive income investors.

💰 Valuation Analysis

P/E Ratio: 63.6 — significantly above industry average (42.9); richly priced.

P/B Ratio: ~9.72 (₹1,196 ÷ ₹123) — premium valuation relative to book value.

PEG Ratio: 1.92 — overvaluation relative to growth; caution warranted.

Intrinsic Value: Likely below current price, given profit contraction and stretched multiples.

👟 Business Model & Competitive Positioning

Segment: Footwear — formal, casual, school, and accessories.

Strengths

Iconic brand presence with deep customer trust.

Omni-channel retailing: physical + digital integration.

Weaknesses

Intense competition from domestic and international brands.

Margin volatility due to cost pressures and lower discretionary demand.

Decline in FII & DII holdings — hints at weakening institutional sentiment.

📉 Technical Indicators

RSI: 38.3 — near oversold territory; potential for a technical bounce.

MACD: –7.63 — negative momentum persists.

Volume: Below average — indicates low conviction among traders.

🎯 Suggested Entry Zone

₹1,130 – ₹1,175: Accumulation zone aligning with 52-week low and RSI bounce potential.

Deeper entries below ₹1,120 may offer better margin of safety, especially after earnings clarity.

📈 Long-Term Investment Outlook

Suitable for a 4–6 year horizon with expectations of recovery in consumer spending and cost optimization.

Key triggers to watch

Expansion into Tier 2/3 cities.

Premium product margins.

Growth in e-commerce and D2C channels.

Want me to build a footwear sector comparison—say, Bata vs. Relaxo, Metro Brands, or Campus Activewear? That might reveal some hidden gems in the space.

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