After the company's June quarter results, Bata India stock hit a new 52-week high of Rs 1,755 per share on the National Stock Exchange on Thursday (Q1FY22). However, the company is still trading at a discount to its pre-covid highs from early 2020.
The stock had pared most of its gains by 11.55 a.m. and was trading 0.71 percent higher at Rs 1,678 on the BSE, while the benchmark Sensex was up 0.39 percent at 54,737 at the same time.
The stock gained 70.74 percent over three years, compared to 43.39 percent for the Nifty Midcap 100.
Bata India reported a decrease of its loss to Rs 69.5 crore in the April-June quarter (Q1), compared to Rs 101 crore in the same period last year, after market hours on Wednesday.
Despite the fact that revenues have nearly doubled year over year, thanks to a favorable base, sales are still 70% lower than in Q1FY20. Due to the second wave of covid-19 infections and the resulting lockdowns, retail sales in Q1FY22 were generally restrained.
Sales through e-commerce platforms, on the other hand, were strong and increased despite the restrictions. In Q1FY22, online sales currently account for 15% of overall revenues.
Dolat Capital Market Pvt. Ltd has lowered its FY22E forecasts to 11.3 (from 19.3 previously) to account for revenue losses in Q1FY21 and weaker operational leverage.
Analysts believe that the Bata India stock is overvalued. As a result, unless growth accelerates, valuations will be difficult to maintain at current levels.