Bata India (BATAINDIA)

FairStock Score: 40/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 1/1

Key Financials

Strengths

• Established footwear brand with promoter holding at 50.16%, aligning ownership with minority investors
• Strong free cash flow of ₹791 Cr despite weak reported earnings
• Piotroski F-Score of 8/9 and Altman Z-Score of 3.54 indicate a fundamentally sound balance sheet
• Dividend yield of 2.41% offers some cash return while waiting for a better entry
• ROCE of 15.14% shows acceptable capital efficiency on operating capital

Concerns

• Profit growth collapsed -48.93% and sales growth is marginally negative at -0.64%
• Valuation is extreme: P/E of 52.82 and EV/EBITDA of 79.26 for a company with falling earnings
• Price is far above the Graham Number of ₹195.34, leaving a massive negative margin of safety
• Debt/Equity of 0.92 is elevated for a consumer lifestyle business, especially with P/B at 6.18

AI Analysis

Looking at Bata India, I start with Mr. Market's mood: a ₹757.70 price, 52.82 times trailing earnings and 6.18 times book, while operating earnings are in retreat. This is not the sort of margin of safety Graham would ever accept. The Graham Number of ₹195.34 puts intrinsic value from earnings and book far below the price, and the margin of safety is a shocking -303.91%. Bata has a real brand and promoter holding of 50.16%, which is a plus, but a brand must ultimately show up in numbers. Sales growth was -0.64%, and profit growth collapsed -48.93%; the latest quarter's ₹945 Cr of sales produced only ₹66 Cr of net profit, roughly a 7% margin. At an EV/EBITDA of 79.26, the market is paying for a recovery that has not yet appeared. ROE of 11.30% and ROCE of 15.14% are respectable, but not enough to justify such exalted multiples with a debt-equity ratio of 0.92. The Piotroski F-Score of 8 and Altman Z of 3.54 tell me the company is not financially fragile; free cash flow of ₹791 Cr is genuine strength. DCF says ₹1072.11, above today's price, but a DCF cannot rescue me from paying a P/E of 52 when profits are falling. The FairStock score of 28/100 reinforces my caution. In Bata, I see a good company caught in a bad price. I need the price to offer a margin of safety, and today it does not.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer