Better operational show, margin gains ahead for Bata

Despite GST boost and opportunities in footwear segment, high valuations will cap upsides in near term

The Bata stock declined four per cent in two days after the company posted lower-than-expected revenue in the September quarter (Q2). While the coming quarters are expected to be better, the high valuation has meant many brokerages are cautious about buying the stock at current prices.
 

Revenue grew 0.5 per cent to Rs 589 crore in Q2, against expectation of Rs 630 crore. On a sequential basis, it fell 20 per cent, on account of lower sales (down 12 per cent) to the wholesale channel due to the goods and services tax (GST). The management expects sales to recover, with