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Bata India share price falls 4% on weak Q2 earnings

Bata India stock has fallen after 5 days of consecutive gains. Bata India stock has erased 0.16% returns in one week, 3% value in one month and 25% year to date

twitter-logoBusinessToday.In | November 11, 2020 | Updated 16:53 IST
Bata India share price falls 4% on weak Q2 earnings
Market capitalisation of the lender stood at Rs 16,871 crore

Bata India share price fell over 4% in Wednesday's session, a day after the company reported a loss in the quarter ended September 2020.

The footwear company reported a loss of Rs 44.3 crore during the July-September quarter against profit of Rs 71.3 crore during the same period last fiscal. Its revenue from operations plunged  49% YoY to Rs 367.9 crore in Q2FY21 from Rs 722 crore.

With a trend reversal, stock price of Bata India opened with a loss of 2.18% at Rs 1335 and later touched an intraday low of Rs 1309, falling 4.08% from the last close of Rs 1364.75. The stocks also touched day's high of Rs 1363.90 today.

Bata India stock has fallen after 5 days of consecutive gains. Bata India stock has erased 0.16% returns in one week, 3% value in one month and 25% year to date.

Bata India stock price is trading higher 100-day moving averages but lower than 5, 20, 50 and 200 day moving average. Market capitalisation of the lender stood at Rs 16,871 croreShares of the footwear company quoted a 52-week high price of Rs 1,897 and a 52-week low of Rs 1,017.20.

Sandeep Kataria, CEO of Bata India Ltd, said: "We moved from revival to revitalisation phase of our strategy. In this quarter, as all the stores opened up gradually, we continued keeping the safety of our customers and employees in mind. As we inch back to a semblance of normalcy, we are mindful that this is going to be a slow and steady recovery. Therefore, innovation via agile product creation, introducing new emerging digital channels, expansion in Tier3-5 towns, and cost-saving digitalisation will continue to be a priority."

Meanwhile, rating firm Dolat Capital is bearish on Bata India and has given sell rating on the stock with a target price of Rs 1040.

The brokerage house believes that the company would suffer due to restricted footfalls in malls, unfavourable base, expected downtrading and less scope for growth in ASP's in the near term, given unfavourable economic environment.

It added, "We have revised our FY21E and FY22E EPS estimates at Rs 5.8 (-71.9%) and Rs 18.3 (-20.8%), respectively. In addition, we believe that the re-negotiation in rent structure would be a challenge for Bata, which would hamper operational performance and profitability and value Bata at 55x FY23E EPS to arrive at a target price of Rs 1,365."

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