Result Update

November 29, 2016

Rating matrix
Rating : Buy Bata India (BATIND) | 411
Target : | 462
Target Period
Potential Upside
:
:
12 months
13% Growth revival from FY18E onwards
Bata India reported a disappointing set of Q2FY17 numbers wherein
Whats changed?
Target Changed from | 575 to | 462
the results came in below our estimates on both revenue and
EPS FY17E Changed from | 15.2 to | 11.1 profitability fronts. Revenues witnessed flattish growth of 1.5% YoY
EPS FY18E Changed from | 19.2 to | 15.0 to | 583.4 crore, below our estimate of | 610 crore. High level of
EPS FY19E Introduced at | 17.1 competition from MNCs as well as e-commerce players adversely
Rating Changed from Hold to Buy impacted revenue growth
On the EBITDA front, the company reported an increase of 11.4%
Quarterly performance YoY to | 53.5 crore (I-direct estimate: | 68.81 crore), on account of
Q2FY17 Q2FY16 YoY (%) Q1FY17 QoQ (%) an 80 bps increase in EBITDA margin to 9.2% but below our
Revenue 583.7 574.5 1.6 674.3 -13.4 estimate of 11.3%. Gross margins remained stagnant at 53% YoY.
EBITDA 53.5 48.1 11.4 82.1 -34.8 Employee cost to sales ratio increased marginally by 37 bps YoY
EBITDA (%) 9.2 8.4 80 bps 12.2 -301 bps but a decline in other expense to sales ratio by 116 bps aided the
PAT 34.6 54.4 -36.4 50.5 -31.5
EBITDA margin
Key financials PAT declined 36.4% YoY to | 34.6 crore (I-direct estimate: | 36.3
(| crore) FY16 FY17E FY18E FY19E
crore). The PAT decline was on account of exceptional income of
Net Sales 2,418 2,254 2,525 2,802
| 31.8 crore in Q2FY16. The company reported higher other income
at | 14.0 crore vs. | 9.72 crore YoY, which supported PAT
EBITDA 270 226 297 341
Net Profit 218 143 193 220 Opening up of destination stores to enhance shopping experience
EPS (|) 17.0 11.1 15.0 17.1 Bata India plans to open five destination stores each year to enhance the
shopping experience of customers with wide collections to customers.
es
Valuation summary Such destination stores will comprise very large retail space at the
FY16 FY17E FY18E FY19E outskirts of cities. It will include amenities like parking space, childrens
P/E 24.2 36.9 27.4 24.0 play area and food court.
Target P/E 27.2 41.6 30.9 27.0 Enhanced product portfolio, expansion of online presence to garner
EV to EBITDA 18.3 21.4 16.3 14.2 higher revenues
Price to book 4.5 4.2 3.9 3.6
Bata is looking at increasing its customer engagement by introducing
RONW (%) 18.5 11.4 14.1 14.9
newer products directed at more fashion savvy customers. To strengthen
ROCE (%) 16.5 12.9 16.8 18.1 its mens contemporary range, the company launched Bata European
collection this quarter. Bata has been facing significant competition from
Stock data
online websites, negatively impacting specific categories of Bata. To
Particular Amount
counter the, same Bata aims to create a separate product portfolio
Market Capitalisation (| Crore) 5,282.5
exclusively for online sales that will make its products more competitive
Debt (FY16) (| Crore) -
against deep discounts offered by e-commerce players. The company has
Cash (FY16) (| Crore) 340.5
also relaunched its website with more user friendly features.
EV (| Crore) 4,942.0
52 week H/L 613 / 400
Shifting focus to youth centric designs
Equity Capital (| Crore) 64.3 To lure todays young generation, the company is heading for a makeover
Face Value (|) 5 in its product portfolio. The company will bring in a young team of
designers and communication specialists who will focus on casual
Price performance fashion footwear. The upcoming new brands will be more casual and
1M 3M 6M 12M stylish to attract the youth. During an event in New Delhi, the company
Bata India -14.1 -22.8 -26.0 -14.8 displayed its new youthful range of footwear.
Liberty Shoes -16.7 -18.4 -21.0 -31.0
Revenue growth to pick up from FY18E onwards; upgrade to BUY
Relaxo Footwear -4.2 -10.0 -8.2 -17.2
H2FY17 is expected to be hit on account of demonetisation resulting in a
Research Analysts decline in footfalls, consequently leading to a fall in revenues for FY17E.
Bharat Chhoda However, we anticipate the impact of the same will remain for a shorter
bharat.chhoda@icicisecurities.com term. Going forward, we expect a revival in sales growth from FY18E
onwards. We believe the recent price correction may act as a good entry
Cheragh Sidhwa point considering the scope of enhanced profitability and improving
cheragh.sidhwa@icicisecurities.com
return ratios. Hence, we upgrade our recommendation on Bata to BUY
with a target price of | 462 (based on 27.0x FY19E EPS of | 17.1).

ICICI Securities Ltd | Retail Equity Research

Variance analysis
Q2FY17 Q2FY17E Q2FY16 YoY (%) Q1FY17 QoQ (%) Comments
Revenue growth was below our estimates and remained flattish with a
Revenue 583.4 610.0 574.5 1.5 674.3 -13.5 marginal increase of 1.5% YoY
Other Operating Income 0.3 0.5 0.2 59.0 0.4 -16.3

Raw Material Expense 274.3 283.6 270.1 1.5 336.4 -18.5

Gross Margin (%) 53.0 53.5 53.0 1 bps 50.1 287 bps Gross margin remained stagnant at 53% YoY
Employee Expense 69.0 70.1 65.8 4.9 66.1 4.5
Rental Expenses 88.6 84.2 87.2 1.6 83.9 5.6
Other Expenses 98.4 103.7 103.5 -5.0 106.2 -7.4

EBITDA 53.5 68.3 48.1 11.4 82.1 -34.8

Operating margin rose marginally by 81 bps YoY on account of other
EBITDA Margin (%) 9.2 11.2 8.4 81 bps 12.2 -300 bps expenses to sales ratio declining 116 bps YoY to 16.86%
Depreciation 16.0 20.1 19.2 -16.8 16.2 -1.5
Interest 1.3 0.5 0.6 125.4 0.7 89.7
Other Income 14.1 6.7 9.7 44.7 11.0 27.5 Other income came in higher at | 14.1 crore vs | 9.7 crore YoY
Exceptional Inome 0.00 0.00 31.75 0.00
PBT 50.4 54.8 69.8 -27.8 76.6 -34.3
Tax Outgo 15.76 18.5 15.4 2.3 25.7 -38.8

PAT 34.6 36.3 54.4 -36.4 50.9 -32.0 PAT declined 36% YoY due to exceptional income of |32 crore in Q2FY16.
Source: Company, ICICIdirect.com Research

Change in estimates
FY17E FY18E FY19E
(| Crore) Old New % Change Old New % Change Introduced Comments
Revenue 2,652.0 2,254.2 -15.0 2,983.5 2,524.7 -15.4 2,802.5 We have revised our estimates downwards for FY17E & FY18E
EBITDA 319.7 225.6 -29.4 403.0 296.7 -26.4 340.7
EBITDA Margin (%) 12.1 10.0 -209 bps 13.5 11.8 -175 bps 12.2
PAT 195.4 143.0 -26.8 246.5 192.6 -21.9 220.2
EPS (|) 15.2 11.1 -26.8 19.2 15.0 -21.9 17.1
Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 2

 Company Analysis
Revenue growth revival from FY18E onwards
Bata has adopted a strategy to design products based on various
consumers. Other than its leather footwear, the company has started
focusing on products catering to the youth and kids along with brand
extensions in the accessories segment. The company will bring in a
young team of designers and communication specialists who will focus
on casual fashion footwear. The upcoming new brands will be more
casual and stylish to attract the youth.
At the top of the product pyramid for Bata, it has placed the brand Hush
Puppies. Hush Puppies has seen good growth over the years and sold
over one million pairs in FY15, FY16. The brand has a presence through
68 exclusive brand stores and 37 shop-in-shops in premium departmental
stores. The company is planning to position Hush Puppies as an
international premium lifestyle brand, which will be more comfortable and
contemporary fashion style.
The company is also aggressively focussing on childrens footwear
through the Bubblegummers brand. As per the company, this segment
has huge potential with ~18% of Indias population below 10 years of
age. The company has also entered into an association with brand
Disney to create a complete collection covering all types of footwear
ranging from casual shoes, canvas shoes to ballerinas to everyday-wear
sandals and chappals.
A high level of competition from MNCs and e-commerce players
adversely impacted revenue growth in H1FY17. The second half of the
fiscal is generally a stronger period for the company on account of the
festive & wedding season. However, we expect revenue growth in
H2FY17 to remain subdued as footfalls are expected to decline on the
back of demonetisation effect, leading to a decline in revenues in FY17E.
However, we expect the impact to remain for a shorter term. Going
forward, we expect revenue growth to revive from FY18E onwards. We
expect revenues to grow 12% in FY18E and 11% in FY19E YoY.
Exhibit 1: Revenue trend

3,000 2,802
2,694
2,525
2,418
2,500 2,254
2,065
2,000 1,842
1,543
| crore

1,500 1,258
1,092
987
1,000

500

-
CY08 CY09 CY10 CY11 CY12 CY13 FY15 FY16 FY17E FY18E FY19E

Source: Company, ICICIdirect.com Research; FY15 is for 15 months

ICICI Securities Ltd | Retail Equity Research Page 3

 Focus on large format stores and addition of franchisee stores
During FY16, the company opened 26 new stores. Over the last three or
four years, the company has clearly focused on closing down stores of
~1,000 sq ft and been adding stores averaging ~3,000 sq ft. The stores
added in 2016 have been larger in size and based on the global design
with ample space for displaying the larger range of products. Going
ahead, the company plans to add 30 new stores every year and also 30
new franchisee stores in Tier-II and Tier-III cities across India. Bata also
plans to add five destination stores each year. Such Destination stores
will have very large retail space located on the outskirts of cities with all
amenities like ample parking space , childrens play area and food court.
Also, the company will continue renovating existing stores and improving
layouts with the objective of increasing same store sales growth for these
stores.
EBITDA margins expected to improve from FY18E onwards
Batas operating margin has gradually expanded from 7.9% in CY07 to
16.2% in CY13. This has been achieved on the back of (a) price hikes; (b)
higher share of leather footwear and (c) lower staff costs due to improved
staff efficiency. In FY16, EBITDA margins were at 11.2%.

For FY17E, we expect EBITDA margins to remain under pressure on

account of a decline in revenues and higher fixed costs such as rent
expense and employee cost, resulting in negative operating leverage.
However, we expect margins to stabilise in FY18E owing to a) revival in
revenue growth b) investments in newly opened large format stores to
start delivering better returns, c) promotional offers & discount schemes
to boost online & offline sales and d) higher SSSG from existing stores.
Exhibit 2: EBITDA margins to expand from FY18E onwards

400 20
350 16.2
15.5 15.5

341
300
335

13.3 15
334

250
285

12.4 11.8 12.2

11.9
(| crore)

11.2
239

200

(%)
9.2 10.0
150
270

10
168

297

100
129

226
91

50
- 5
CY08 CY09 CY10 CY11 CY12 CY13 FY15 FY16 FY17E FY18E FY19E

EBITDA EBITDA Margin

ICICI Securities Ltd | Retail Equity Research Page 4

 PAT, return ratios to recover from FY18E onwards
We expect PAT to decline from | 218.6 crore in FY16 to | 143.0 crore in
FY17E on account of a decline in revenue and absence of exceptional
gain to the tune of | 74.7 crore in FY16. However, we expect a revival in
PAT from FY18E onwards. Excluding exceptional gain present in FY16,
PAT is likely to register a CAGR of 15% in FY16-19E.
The company reported an RoE of 18.5% in FY16. However, if we exclude
exceptional gain of | 74.7 crore, we get an adjusted RoE of 12%. Return
ratios are expected to decline in FY17E on account of a subdued
operational performance. However, they are likely to pick up, going
forward. We expect RoCE to increase from 16.5% in FY16 to 18.1% in
FY19E with RoE increasing from 12.2 % (adjusted) in FY16 to 14.9% in
FY19E.

Exhibit 3: PAT margin to expand FY18E onwards Exhibit 4: and return ratios to improve FY18E onwards
45
250 15 34
38 33 33 33
231

200 39
226

220
218

28
31 25
193
191

150
172
(| crore)

10 24
(%)
9.0 7.9
(%)
143

100 7.6 16 17 18
9.3 9.2 24 25
17 23 23
8.6 8.6 6.3 20 13 11
50 18 14 15
10
- 5 CY09 CY10 CY11 CY12 CY13 FY15 FY16 FY17E FY18E FY19E
CY11 CY12 CY13 FY15 FY16 FY17E FY18E FY19E
RoE RoCE
PAT PAT Margin

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 5

 Key takeaways from annual report

FY16 was a challenging year for the company on account of second

continuous monsoon failure, resulting in reduced rural demand in
several areas of the country and ever increasing competition from
local and overseas players in the footwear industry. Despite various
challenges company focused on delivering value to the customers.
During the year, the company introduced various new designs of
footwear across all categories for men, women & children in order to
maintain the leadership position in the organised footwear market in
India
Recently, the company initiated a new campaign, Bata Club, which is
a mobile based customer loyalty initiative. As on FY16, the Bata club
has ~ 6.7 million memberships, which is growing rapidly, resulting in
incremental revenue for the company.
In FY16, the company decided to shift its focus from opening new
retail stores to ensuring same store growth. In order to achieve
volume growth, company has continued its penetration into Tier-2
and Tier-3 cities. An appropriate market campaign to reignite growth
is also under preparation
During FY16, the company opened 26 new retail stores in India. Bata
plans to add ~ 30 new retail stores every year to increase its
presence in malls and high street markets. The company continues to
make investments on renovating existing stores to enhance
customers shopping experience
The company plans to open five destination stores each year, which
will be located at the outskirts of the cities. These stores will comprise
very large retail space located that will include amenities like food-
court and childrens play area
In order to tap into the exponential e-commerce growth in India, the
company has undertaken several initiatives to strengthen its digital
multi-channel business. Apart from having their own website, they
have tie ups with various website partners such as Amazon, Flipkart,
Jabong, etc. During the year, the company sold more than 3.8 lakh
pairs of footwear online and achieved a turnover of | 36 crore
FY16 was a milestone year for its international premium brand, Hush
Puppies as the company sold over a million pair in aforesaid period.
During the year, Hush Puppies embarked on a journey of re-
positioning itself as an International premium lifestyle casual footwear
brand

ICICI Securities Ltd | Retail Equity Research Page 6

 Valuation
H2FY17 is expected to be hit on account of demonetisation resulting into
decline in footfalls, consequently leading to a fall in revenues for FY17E.
However, we expect the impact of the same to remain for a shorter term.
Going forward, we expect a revival in sales growth from FY18E onwards.
We believe the recent price correction acts a good entry point
considering the scope of enhanced profitability and improving return
ratios. Hence, we upgrade our recommendation on Bata to BUY with a
target price of | 462 (based on 27.0x FY19E EPS of | 17.1).

Exhibit 5: Valuations
Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE
(| cr) (%) (|) (%) (x) (x) (%) (%)
FY16 2418.5 -10.2 17.0 -5.5 24.3 18.4 18.5 16.5
FY17E 2254.2 -6.8 11.1 -34.5 37.1 21.5 11.4 12.9
FY18E 2524.7 12.0 15.0 34.6 27.6 16.3 14.1 16.8
FY19E 2802.5 11.0 17.1 14.3 24.1 14.2 14.9 18.1
Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 7

Recommendation history vs. consensus estimate
1,000 100.0
900 90.0
800 80.0
700 70.0
600 60.0
(|)

500 50.0

(%)
400 40.0
300 30.0
200 20.0
100 10.0
0 0.0
Nov-14 Jan-15 Apr-15 Jun-15 Sep-15 Nov-15 Jan-16 Apr-16 Jun-16 Sep-16 Nov-16

Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research

Key events
Date Event
Jan-10 Bata achieved 10.6% revenue growth in CY09. Operating margin expanded 265 bps to 11.9% on the back of improving product mix
Sep-10 Topline continued to grow at 10-15% and the company continued to witness margin expansion
Jan-11 From the 10-12% topline growth, the company started to report revenue growth in excess of 20%
Sep-11 In Q3CY11, the company achieved a topline growth of 26.3% YoY. The operating margin too expanded from 12.8% (Q3CY10) to 14.5% (Q3CY11)
Dec-11 After a series of margin expansions over the last five to seven years, the operating margin remained flat at 15.5% for CY11
May-12 The company continued to post robust topline growth. The PAT growth was even faster considering margin expansion
Apr-13
The rate of topline growth came down to low double digits and as margins remained flattish, the pace of PAT growth started to decline. PAT grew 6.8% in Q1CY13
Jul-13 Bata announced plans to open 100 stores each year thereby increasing the scope for revenue growth
Jan-14 The company's growth rate slipped to higher single digits on the back of dampened consumer sentiment. Revenues grew ~9% in Q4CY13 and Q1CY14. Similarly,
PAT growth slipped to the 2.5-3.5% range
May-15 Announced Stock Split from FV |10 to |5
Aug-15 Ties up US Footwear Brand Caterpillar
Sep-15 Bata stock split from FV |10 to |5
Source: Company, ICICIdirect.com Research

Top 10 Shareholders Shareholding Pattern

Rank Investor Name Latest Filing Date % O/S Position (m) Change (m) (in %) Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
1 Bata (BN) B.V. 30-Sep-16 52.96% 68.1 0.00 Promoter 53.0 53.0 53.0 53.0 53.0
2 Life Insurance Corporation of India 30-Sep-16 5.87% 7.5 1.60 FII 11.9 9.4 8.4 7.5 5.8
3 ICICI Prudential Asset Management Co. Ltd. 30-Sep-16 3.90% 5.0 -0.38 DII 15.1 18.4 18.6 20.3 21.8
4 Birla Sun Life Asset Management Company Ltd. 31-Oct-16 2.73% 3.5 0.02 Others 20.1 20.1 20.1 19.3 19.4
5 Franklin Templeton Asset Management (India) Pvt. Ltd. 30-Sep-16 2.67% 3.4 0.43
6 Fidelity International Asset Management Company (Korea) 30-Sep-16 1.64% 2.1 0.43
7 Vidya Investment & Trading Co., Pvt. Ltd. 30-Sep-16 1.59% 2.0 0.00
8 FIL Investment Management (Singapore) Ltd. 30-Jun-16 1.31% 1.7 -0.37
9 Axis Asset Management Company Limited 31-Oct-16 1.23% 1.6 -0.77
10 IDFC Asset Management Company Private Limited 30-Sep-16 1.16% 1.5 0.00
Source: Reuters, ICICIdirect.com Research

Recent Activity
BUY SELL
Investor Name Value Shares Investor Name Value Shares
Life Insurance Corporation of India 11.8 1.6 Axis Asset Management Company Limited -5.6 -0.8
Franklin Templeton Asset Management (India) Pvt. Ltd. 3.2 0.4 ICICI Prudential Asset Management Co. Ltd. -2.8 -0.4
Fidelity International Asset Management Company (Korea) 3.1 0.4 FIL Investment Management (Singapore) Ltd. -3.0 -0.4
Pioneer Investment Management Ltd. 0.7 0.1 Baroda Pioneer Asset Management Company Limited -2.0 -0.3
Union KBC Asset Management Company Pvt. Ltd. 0.4 0.1 Excel Funds Management Inc. -1.5 -0.2
Source: Reuters, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 8

Financial summary
Profit and loss statement
ES
| Crore Cash flow statement | Crore
(Year-end March) FY16 FY17E FY18E FY19E (Year-end March) FY16 FY17E FY18E FY19E
Total operating Income 2,418.5 2,254.2 2,524.7 2,802.5 Profit before Tax 223.5 211.9 285.3 326.1
Growth (%) -10.2 -6.8 12.0 11.0 Add: Depreciation 75.2 63.3 68.2 73.4
Raw Material Expenses 1,155.9 1,121.5 1,210.5 1,338.0 (Inc)/dec in Current Assets 1.9 110.1 -115.0 -114.9
Employee Expenses 262.5 266.0 285.3 330.7 Inc/(dec) in CL and Provisions -51.6 -65.5 56.3 52.7
Manufacturing Expenses 403.9 396.7 404.0 417.6 Taxes Paid -79.7 -68.9 -92.7 -106.0
Selling & Distribution Expenses 95.6 122.6 164.1 185.0 Others -12.9 -13.3 -15.3 -15.7
Admin & Other Expenses 230.2 121.7 164.1 190.6 CF from operating activities 156.5 237.7 186.9 215.7
Total Operating Expenditure 2,148.1 2,028.6 2,228.0 2,461.8 (Inc)/dec in Fixed Assets 24.8 -100.4 -115.7 -134.3
EBITDA 270.3 225.6 296.7 340.7 Others 16.4 15.6 19.8 20.5
Growth (%) -19.3 -16.5 31.5 14.8 CF from investing activities 41.2 -84.9 -95.9 -113.8
Depreciation 75.2 63.3 68.2 73.4 Issue/(Buy back) of Equity 0.0 0.0 0.0 0.0
Interest 1.7 2.3 2.5 2.8 Inc/(dec) in loan funds 0.0 0.0 0.0 0.0
Other Income 30.1 51.8 59.3 61.7 Dividend paid & dividend tax -55.4 -66.4 -89.4 -102.1
Exceptional Item 74.7 0.0 0.0 0.0 Others -1.7 -2.3 -1.5 -1.8
PBT 298.2 211.9 285.3 326.1 CF from financing activities -57.1 -68.6 -90.9 -104.0
Growth (%) -24.8 -5.2 34.6 14.3 Net Cash flow 140.5 84.2 0.1 -2.1
Total Tax 79.7 68.9 92.7 106.0 Opening Cash -45.1 95.4 179.6 181.7
PAT 218.5 143.0 192.6 220.2 Deposits with maturity > 3 months 245.0 279.0 275.7 272.8
Growth (%) -5.5 -34.5 34.6 14.3 Closing Cash 340.5 458.6 457.4 454.5
EPS (|) 17.0 11.1 15.0 17.1 Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research

Balance sheet | Crore Key ratios

(Year-end March) FY16 FY17E FY18E FY19E (Year-end March) FY16 FY17E FY18E FY19E
Liabilities Per share data (|)
Equity Capital 64.3 64.3 64.3 64.3 EPS 17.0 11.1 15.0 17.1
Reserve and Surplus 1,118.6 1,195.3 1,298.6 1,416.6 Cash EPS 22.8 16.1 20.3 22.8
Total Shareholders funds 1,182.9 1,259.6 1,362.8 1,480.8 BV 92.0 98.0 106.0 115.2
Total Debt - - - - DPS 3.5 4.5 6.0 6.9
Deferred Tax Liability - - - - Cash Per Share 26.5 35.7 35.6 35.4
Minority Interest / Others - - - - Operating Ratios
Total Liabilities 1,182.9 1,259.6 1,362.8 1,480.8 EBITDA Margin (%) 11.2 10.0 11.8 12.2
PBT Margin (%) 12.3 9.4 11.3 11.6
Assets PAT Margin (%) 9.0 6.3 7.6 7.9
Gross Block 751.1 854.4 973.2 1,110.2 Inventory days 103.0 105.0 106.3 107.5
Less: Acc Depreciation 448.9 507.7 610.9 684.3 Debtor days 9.5 7.4 7.7 7.4
Net Block 307.7 311.7 362.3 425.9 Creditor days 135.1 112.0 113.0 112.5
Capital WIP 13.4 10.6 8.5 6.8 Return Ratios (%)
Total Fixed Assets 321.1 322.3 370.8 432.7 RoE 18.5 11.4 14.1 14.9
Investments 5.0 5.0 5.0 5.0 RoCE 16.5 12.9 16.8 18.1
Inventory 678.8 648.5 735.3 825.4 RoIC 26.1 18.0 21.4 21.6
Debtors 69.6 45.7 53.3 56.8 Valuation Ratios (x)
Loans and Advances 219.2 162.3 181.8 201.8 P/E 24.3 37.1 27.6 24.1
Other Current Assets 10.2 11.2 12.3 13.5 EV / EBITDA 18.4 21.5 16.3 14.2
Cash 340.5 458.6 457.4 454.5 EV / Net Sales 2.0 2.1 1.9 1.7
Total Current Assets 1,318.3 1,326.3 1,440.0 1,552.0 Market Cap / Sales 2.2 2.3 2.1 1.9
Current Liabilities 502.0 419.9 452.0 491.2 Price to Book Value 4.5 4.2 3.9 3.6
Provisions 61.4 78.0 102.2 115.7 Solvency Ratios
Total Current Liabilities 563.4 497.9 554.2 606.9 Debt/EBITDA 0.0 0.0 0.0 0.0
Net Current Assets 754.9 828.4 885.8 945.0 Debt / Equity 0.0 0.0 0.0 0.0
Deferred Tax Assets 101.9 103.9 101.2 98.1 Current Ratio 2.3 2.7 2.6 2.6
Application of Funds 1,182.9 1,259.6 1,362.8 1,480.8 Quick Ratio 1.1 1.4 1.3 1.2
Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 9

ICICIdirect.com coverage universe (Retail)
CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%)
Sector / Company (|) TP(|) Rating (| Cr) FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E
Bata India (BATIND) 411 462 Buy 5,283 17.0 11.1 15.0 24.2 36.9 27.4 18.3 21.4 16.3 16.5 12.9 16.8 18.5 11.4 14.1
Shoppers Stop (SHOSTO) 300 400 Buy 2,489 0.2 2.2 5.4 1,339 152.1 61.4 18.1 17.0 13.5 4.5 4.8 7.7 0.4 3.5 8.1
Titan Company (TITIND) 306 435 Buy 27,186 8.0 8.9 11.3 38.5 34.5 27.1 35.1 26.7 23.1 23.4 26.5 26.4 20.1 19.4 21.1
Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 10

RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai 400 093
research@icicidirect.com

ICICI Securities Ltd | Retail Equity Research Page 11

ANALYST CERTIFICATION
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ICICI Securities Ltd | Retail Equity Research Page 12