The footwear company is aggressively expanding its retail footprint and has reported good numbers for the quarter ended 30 June 2013
Bata India Ltd, India’s leading footwear retailer and manufacturer, saw its June quarter net profit grow 17.6% to Rs61.94 crore driven by robust sales through strong retail expansion and product portfolio.
During the quarter to end-June, the footwear manufacture’s total revenues, including sales, grew 13.7% to Rs272 crore over the same period last year. The company reported an operating profit was Rs96.05 crore.
Rajeev Gopalakrishnan, group managing director, of Bata India said “We expect to benefit from our aggressive retail expansion, newer designs and newer product ranges in the future. We are confident our momentum will accelerate in line with our expectations as we move through the year.”
According to Moneylife data, the company's three-quarter average growth in net sales comes to 14% while the growth in operating profit is 11%. Net sales for the quarter ended 30 June 2013 grew 13.7% while its operating profit, excluding depreciation and other income, was impressive and grew at 16%. The company's market capitalisation is 15.53 times its operating profit and return on net worth is 27%.
Nomura Equity Research has reiterated a ‘Buy’ with a target price of Rs990 on Bata India. In a research report, Nomura said, “Given the performance at the half year, we are confident that the company will deliver on our expected numbers in CY13. The company’s strategy of driving growth through retail expansion and a strong product portfolio is delivering results. We maintain our ‘Buy’ rating on the stock.”
Bata India will be opening approximately 100 new format stores this year that will be more than an average of 3,000 square feet. The new stores will feature the new format, which provides shoppers with an inviting and inspiring shopping environment. This quarter, Bata has opened 15 new stores in prime shopping locations in all major metros, including Mumbai, Delhi, Bangalore, Chennai, Hyderabad and Bangalore.
The stock is one of the picks for the stockletter (http://moneylife.in/stockletters.html?46). It was recommended at Rs895. Currently, the stock is quoting at Rs909, up over 3%, on the Bombay Stock Exchange at the time of writing this piece, while the BSE Sensex is marginally up at 19,825.
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