Bata India share price hits 52-week low; Geojit downgrades the stock
₹1369.65 in intraday trade on BSE on Thursday, March 14. Bata India share price opened at ₹1,389 against the previous close of ₹1,404 and declined 2.4 per cent to hit its 52-week low. The stock, however, pared its losses later and traded 0.28 per cent lower at ₹1,400 around 1:25 pm.
Bata India share price has been performing poorly this year. The stock has fallen about 17 per cent this year so far (considering today's 52-week low). On the monthly scale, the stock declined nearly 10 per cent in January, followed by an over 5 per cent fall in February.
In March so far, the stock is down nearly 3 per cent. Recently, brokerage firm Geojit Financial Services downgraded the stock to an 'accumulate' from a 'buy' and revised the target price to ₹1,670, considering the continued weakness in demand. The brokerage firm, in its report on March 12, pointed out that in Q3FY24, Bata India's revenue growth was muted year-on-year (YoY) due to the weakness in the mass segment.
However, the brokerage firm added that the company's premium segments recorded strong growth, resulting in gross margin improvement of 120bps YoY, while the EBITDA margin declined by 280 bps YoY due to higher ad and IT spending. Geojit believes Bata India can revive its revenue growth trajectory due to its strong brand recall and reach. "The enhanced investments in technology and marketing, as well as tight control on overhead costs, are likely to bear fruits in the long run.
We believe Bata India can revive its revenue growth trajectory given its strong brand recall and distribution reach and strong balance sheet. The stock currently trades at 49 times one-year forward PE (price-to-earnings ratio)," said Geojit. Moreover, Geojit believes Bata India’s strong focus
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