Motilal Oswal Maintains Neutral Rating on Bata India, Targets Rs 600

Bata India Reports 5% Revenue Growth in 4QFY26

Bata India, a leading footwear and apparel company, has reported a 5% revenue growth in the fourth quarter of fiscal year 2026 (4QFY26). This marks a second consecutive quarter of improving momentum, driven by broad-based growth across channels and categories. The company's reported earnings before interest, taxes, depreciation, and amortization (EBITDA) margin contracted 135 basis points (bp) year-over-year (YoY) to 20.9%, primarily due to one-off expenses. However, adjusted profit after tax (PAT) rose 21% YoY to INR 525 million, reflecting stronger underlying profitability.

The fiscal year 2026 (FY26) was a year of operational reset for Bata India, with management focused on improving the consumer value proposition through product refreshes, inventory simplification, and channel execution. Although the year started weakly, with revenue remaining broadly flat, the company's growth accelerated in the second half of FY26, indicating early benefits from these initiatives. This momentum is expected to continue, driving the company's future growth.

Outlook and Recommendations

Read also: UK Business Secretary Faces Scrutiny Over Lack of Timeline for India Trade Deal Amid Steel Industry Dispute

Based on the company's performance and growth prospects, Motilal Oswal's research team has revised its earnings forecast for Bata India. The team expects the company to achieve a compound annual growth rate (CAGR) of 4% in revenue, 7% in EBITDA, and 7% in adjusted PAT from FY26 to FY28. The team has reiterated its "Neutral" rating for the company, with a revised target price of INR 600, based on a price-to-earnings (P/E) ratio of 25 times the estimated earnings per share (EPS) for FY28.