BATAINDIA - Investment Analysis

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

📊 Investment Rating: 3.4

🧠 Long-Term Investment Analysis

Bata India shows signs of being a moderate long-term candidate, but not without caution

Valuation Concerns

Stock P/E of 63.6 is significantly higher than the industry average of 42.9, indicating overvaluation.

PEG Ratio of 1.92 suggests growth is not strong enough to justify the high P/E.

Price-to-Book Ratio ~9.7 (Current Price ₹1,196 / Book Value ₹123) is steep for a consumer goods company.

Profitability Metrics

ROE (15.6%) and ROCE (15.1%) are decent, but not exceptional for a mid-cap consumer brand.

Dividend Yield of 1.59% adds some passive income appeal.

Technical Indicators

RSI at 38.3 and MACD negative suggest bearish momentum.

Trading below both 50-DMA and 200-DMA, indicating weakness.

Volume below average, hinting at low investor interest.

Fundamental Weakness

Quarterly PAT down 27.9%, showing earnings pressure.

FII and DII holding slightly reduced, signaling institutional caution.

🎯 Ideal Entry Price Zone

Based on valuation and technical trends, a reasonable entry zone would be

Entry Zone Rationale

₹1,120–₹1,160 Near 52-week low and RSI oversold zone

< ₹1,100 Strong buy zone if fundamentals stabilize

This range offers a better margin of safety and aligns with historical support levels.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: Minimum 3–5 years, provided the company improves earnings and maintains ROE/ROCE.

Exit Strategy

Partial exit if price rebounds to ₹1,400–₹1,500 without earnings improvement.

Full exit if ROE/ROCE drop below 12% or PEG rises above 2.5.

Hold if PEG improves to <1.5 and quarterly profits stabilize or grow.

Would you like a comparison with Relaxo or Metro Brands to see how Bata stacks up in the footwear space? 👟

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