Bata stock walks steady on healthy retail growth, strong brand equity

Street backs premium valuation given firm's earnings potential

Despite weak top line growth in the March quarter (Q4), the stock of Bata India has gained close to 5 per cent over the last one month, outpacing a 3 per cent rise in the BSE FMCG index. 

What enthused the Street was the expectation of healthy retail growth in the coming quarters and the improving earnings outlook.
 

Like its peers, Bata India, too, witnessed slowing consumption demand in Q4 with deceleration in retail growth to about 11 per cent (18 per cent in Q3). 

However, the Street believes that the company, driven by the retail segment that