BATAINDIA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.9
| Stock Code | BATAINDIA | Market Cap | 11,067 Cr. | Current Price | 860 ₹ | High / Low | 1,384 ₹ |
| Stock P/E | 60.6 | Book Value | 118 ₹ | Dividend Yield | 2.21 % | ROCE | 15.2 % |
| ROE | 15.6 % | Face Value | 5.00 ₹ | DMA 50 | 934 ₹ | DMA 200 | 1,094 ₹ |
| Chg in FII Hold | -0.71 % | Chg in DII Hold | -0.08 % | PAT Qtr | 18.7 Cr. | PAT Prev Qtr | 54.9 Cr. |
| RSI | 28.2 | MACD | -23.5 | Volume | 87,477 | Avg Vol 1Wk | 1,16,038 |
| Low price | 835 ₹ | High price | 1,384 ₹ | PEG Ratio | 1.78 | Debt to equity | 0.91 |
| 52w Index | 4.47 % | Qtr Profit Var | -64.2 % | EPS | 13.0 ₹ | Industry PE | 38.7 |
📊 Analysis: BATAINDIA shows moderate fundamentals but faces valuation and earnings challenges. ROE at 15.6% and ROCE at 15.2% reflect decent efficiency. However, the stock trades at a high P/E of 60.6 compared to the industry average of 38.7, suggesting overvaluation. The PEG ratio of 1.78 indicates growth is priced at a premium. Dividend yield of 2.21% adds some income appeal. Debt-to-equity is manageable at 0.91. EPS of ₹13.0 is modest, and quarterly PAT dropped sharply from ₹54.9 Cr. to ₹18.7 Cr. (-64.2%), raising concerns about earnings consistency. Technical indicators (RSI 28.2, MACD negative) suggest oversold conditions with bearish momentum.
💰 Entry Price Zone: Ideal entry would be in the ₹820 – ₹860 range, closer to its 52-week low of ₹835, where valuations align better with fundamentals.
⏳ Exit Strategy / Holding Period: For existing holders, a medium-term horizon (2–3 years) is advisable. Consider partial profit booking near ₹1,300–₹1,350 (upper range) unless earnings growth stabilizes. Long-term holding should depend on consistent profitability and margin recovery.
✅ Positive
- ROE (15.6%) and ROCE (15.2%) show decent efficiency.
- Dividend yield of 2.21% adds shareholder value.
- Debt-to-equity ratio of 0.91 ensures financial resilience.
- RSI at 28.2 indicates oversold conditions, potential for rebound.
⚠️ Limitation
- High P/E (60.6) compared to industry average (38.7).
- PEG ratio of 1.78 signals expensive growth.
- Quarterly PAT decline (-64.2%) raises concerns about earnings stability.
- FII (-0.71%) and DII (-0.08%) holdings reduced, showing cautious sentiment.
📉 Company Negative News
- Sharp decline in quarterly profit highlights operational weakness.
- Weak technical indicators (MACD negative) suggest bearish momentum.
📈 Company Positive News
- Dividend payout supports investor confidence.
- Oversold RSI levels may trigger short-term recovery.
🏭 Industry
- Footwear and retail sector trades at an average P/E of 38.7, lower than BATAINDIA’s valuation.
- Industry outlook remains steady with demand recovery post-pandemic and rising consumer spending.
🔎 Conclusion
BATAINDIA is financially stable but currently overvalued with weak earnings performance. Long-term investors should wait for a correction towards ₹820–₹860 before entering. Existing holders may adopt a medium-term horizon and consider profit booking near highs unless earnings growth stabilizes significantly.