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    Bata India shares rise over 6% after Q4 results; Axis Securities upgrades stock

    Bata India shares rise over 6% after Q4 results; Axis Securities upgrades stock

    Bata India shares rise over 6% after Q4 results; Axis Securities upgrades stock
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    By Pranati Deva   IST (Published)

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    The share price of Bata India jumped over 6 percent after the company reported its March quarter earnings that were in line with the estimates.

    The share price of Bata India jumped over 6 percent after the company reported its March quarter earnings that were in line with the estimates. The country's largest shoemaker reported a 23.3 percent fall in consolidated net profit at Rs 29.47 crore in Q4 as against Rs 38.40 crore in the year-ago period.
    Revenue from operations declined to Rs 589.90 crore during the quarter under review from Rs 620.57 crore in Q4FY20.
    The stock rose as much as 6.4 percent to its day's high of Rs 1,657.50 per share.
    Commenting on the results, Bata CEO Sandeep Kataria said, “The Q4 results are satisfactory for us, considering Q3 sales have historically always been better because of the festive season."
    “We continued our march towards recovery via our channel expansion efforts via franchising, distribution and marketplace routes," he said.
    For the full fiscal year FY21, the firm posted a net loss of Rs 89.31 crore versus Rs 32.89 crore in the previous year. Its revenue from operation in FY21 was down 44.1 percent to Rs 1,708.48 crore versus Rs 3,056.11 crore in 2019-20.
    The firm also announced that its board has recommended a dividend of 80 percent, which is Rs 4 per equity share of Rs 5 each for 2020-21.
    After the earnings, Axis Securities upgraded the stock to 'add' from 'reduce' and raised its target to Rs 1,700 per share from Rs 1,550 earlier.
    The brokerage cut its FY22 revenue/EBITDA estimates by 20 percent/ 50 percent, however, it raised FY23 revenue/EBITDA estimates by 2 percent/7 percent respectively. It expects better revenue recovery in FY23.
    "Potential gains from high pent-up demand, sustained store expansion and strengthened management bandwidth underpin our change in view to a constructive one," it said.
    It also added that Bata is better placed versus competitors due to its strong balance sheet. It had a net cash surplus of over Rs 1000 crore in FY21.
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