Bata soars 7 per cent on Motilal's 'buy' call

Bata India shares gained as much as 7 per cent on Tuesday after domestic brokerage Motilal Oswal initiated coverage on the footwear major with a "buy" rating. At Rs 975 per share, Motilal's target price on Bata indicates a 20 per cent appreciation from last traded price of Rs 810.

Bata India shares traded 5.7 per cent higher at Rs 857 as of 12.40 p.m., outperforming a 0.4 per cent gain in the broader Sensex.

Motilal Oswal said strong brand and aggressive store expansion is likely to drive Bata's market share. Increased contribution from women and child segment may drive growth, the brokerage added.

According to Street buzz, Bata is likely to announce a 20,000 square feet store in Mumbai at its scheduled annual general meeting (AGM) on Tuesday. A 10,000 square feet store in Ahmedabad is already operational.

The Mumbai store is likely to be on the lines of the 20,000 square feet Bangladesh store the group company operates in Bangladesh.

Bata shares have underperformed the broader Sensex over the last year, rising 2.7 per cent against a 23 per cent gain in the BSE benchmark. However, Bata has gained 9 per cent in the last three months against a 3 per cent gain in the broader index.