BATAINDIA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:14 pm

Fundamental Rating: 3.5

📊 Financials: Bata India shows moderate fundamentals with ROE at 15.6% and ROCE at 15.2%, reflecting decent capital efficiency. EPS stands at ₹13.0, supported by profitability, though quarterly PAT dropped sharply from ₹54.9 Cr. to ₹18.7 Cr. (-64.2% QoQ), indicating earnings pressure. Debt-to-equity ratio of 0.91 is manageable but higher than ideal for a consumer company.

💹 Valuation: Current P/E of 66.9 is significantly higher than the industry average of 37.6, suggesting overvaluation. P/B ratio (~8.1) is elevated compared to book value of ₹118. PEG ratio of 1.97 indicates weak earnings growth relative to valuation. Intrinsic value appears lower than current price, limiting margin of safety.

👟 Business Model: Bata India operates as a leading footwear brand with strong retail presence and brand recognition. Competitive advantage lies in its wide distribution network, trusted brand, and diversified product portfolio. However, earnings volatility and dependence on discretionary consumer spending remain challenges.

📈 Entry Zone: Attractive accumulation zone is around ₹900–₹940 (near support and below DMA 50 & 200). Current price ₹951 is below both DMA 50 and DMA 200, suggesting bearish momentum. RSI at 29.7 indicates oversold conditions, while MACD (-28.5) signals weakness.

🕰️ Long-Term Guidance: Bata India is a fundamentally stable consumer brand with strong market presence. However, valuations are stretched and earnings have weakened. Best strategy is cautious accumulation near support levels and holding for long-term exposure to consumer demand recovery.

Positive

• Strong brand recognition and wide retail presence 👟
• ROE (15.6%) and ROCE (15.2%) show decent capital efficiency 💪
• Dividend yield at 2.01% provides moderate income return 💵

Limitation

• High P/E (66.9) compared to industry average ⚠️
• P/B ratio (~8.1) indicates overvaluation 📉
• Quarterly PAT declined sharply (-64.2% QoQ) ❌

Company Negative News

• Quarterly PAT dropped from ₹54.9 Cr. to ₹18.7 Cr. 📉
• Stock trading below DMA 50 and DMA 200 indicates bearish trend ⚠️

Company Positive News

• DII holdings increased (+0.04%), showing minor domestic institutional support 📊
• RSI at 29.7 indicates oversold conditions, potential for technical rebound 🚀

Industry

• Footwear and retail sector benefits from rising consumer demand and urbanization 👟
• Industry P/E at 37.6 indicates moderate valuation compared to Bata’s premium 📊

Conclusion

⚖️ Bata India is a leading footwear brand with strong fundamentals and brand equity. However, stretched valuations and weak earnings limit upside. Best strategy is cautious accumulation near ₹900–₹940 and holding for long-term exposure to consumer demand recovery.