Bata India
Bata India had hit a new 52-week high at Rs.1003.40, when investors had got enthused by the fact that parent company, Bata BN BV had bought 6.08 lakh shares of Bata India from the open market (BSE) at Rs.888.05/share. ICICI Brokerage was the seller, who sold 6.27 lakh shares at Rs.88.35/share. The parent company as at 30th Sept 2013 held 3.34 crore shares or 52.01% stake in the company.
The stock was also riding high on the exuberant performance it posted for its third quarter ended 30th Sept 2013, wherein posted a 14% rise in net sales at Rs.484 core and net profit rose 17% at Rs.37 crore. Its overall operating costs rose 13% at Rs.437 crore. The company’s strategy of offering new footwear designs is obviously helping its bottomlines because at time when competition from China and cheaper footwear is killing other footwear companies, Bata is actually doing pretty well. The company is also increasing its reach to improve volumes and by year end, which for Bata ends on 31st Dec, hopes to have opened a total 100 new stores. This is a debt free MNC and held cash and equivalents to the tune of Rs.254 crore as at 30th Sept 2013, resulting in cash EPS of Rs.39. We had recommended this stock in May’13, in our Stock Recommendation section at Rs.740 for a target of Rs.900 within 12 months and it surpassed this target in six months time.