‘Buy’ Bata India - Says Centrum Broking

Research: Centrum Broking
Bata CMP: Rs 86
Target price: Rs 132

Centrum Broking has rated Bata India as a ‘buy’ with a price target of Rs 132, citing strong growth prospects and attractive valuations as the key trigger. "Consumption slowdown has not impacted Bata’s growth trajectory due to down-trading effect. The company’s continued focus on improving shoe designs, particularly for women and youth, together with stricter cost-control measures; improved product mix; modernisation and consolidation of manufacturing operations and transformation of the wholesale operation makes us sanguine on the company’s robust businessmodel," the Centrum note to clients said. "Superior performance during a period of dampening consumer demand has enhanced our confidence in the management’s capabilities and business model. The stock trades at an attractive P/E of 7.5 times CY09 (estimated) and 6.2 times CY10 (estimated)," the note added