Wednesday, 3 July 2013

Angry Birds tie up could be big trigger for Bata, says Nikunj Dalmiya

Bata is possibly looking at an interesting tie up with the owners of Angry Birdss. Angry Birdss is the world's number one most downloaded app and for the first time the makers of Angry Birds could be coming together anywhere in the world and that too with a shoe company. So that is the short term trigger. That is something which will keep the stock warm at least in the short term.

Then there are couple of medium term triggers for Bata, one, they are looking at complete aggressive and big rollout of high end leather products and they will now be focussing on tier 2 cities.

Bata has got a very strong balance sheet but they have only 15% market share of the organised shoe market because they do not have a very strong focus in tier 2 and tier 3 cities. Guess what, the new management is likely to change that.

Bata is likely to get a large and a chunky order from Indian Air Force. We always think that Bata is only doing retailing but Bata only gets 75% of their total revenue from the retail business and the organised shoe market. Remaining 25 is essentially coming from defence supply and it is also coming from industrial supply.

So there are couple of triggers in the short term which will keep the stock warm and I am particularly excited about the Angry Birdss tie up. what about the stock, well, they came out with okay set of numbers for the quarter gone by, stock came down, it is still a very popular stock, it is now trading at the highest point of the day, it tends to be illiquid but the ownership pattern is very stretched. There are some fund managers who are actively accumulating Bata as we speak. So 856 may be a good price to buy into Bata. Like I mentioned, there are multiple triggers in the short term but I am excited about the Angry Birdss tie up.
http://articles.economictimes.indiatimes.com/2013-07-02/news/40329134_1_bata-nikunj-dalmia-shares-popular-stock

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