Analysts Have Lowered Expectations For Bata India Limited (NSE:BATAINDIA) After Its Latest Results

Bata India Limited (NSE:BATAINDIA) just released its latest yearly report and things are not looking great. It was a pretty negative result overall, with revenues of ₹17b missing analyst predictions by 6.6%. Additionally, the business reported a statutory loss of ₹6.95 per share, larger than the analyst had forecast prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

View our latest analysis for Bata India

Taking into account the latest results, the consensus forecast from Bata India's single analyst is for revenues of ₹24.5b in 2022, which would reflect a sizeable 43% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Bata India forecast to report a statutory profit of ₹9.10 per share. Before this earnings report, the analyst had been forecasting revenues of ₹35.4b and earnings per share (EPS) of ₹33.20 in 2022. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the ₹1,564 price target, showing that the analyst doesn't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Bata India is forecast to grow faster in the future than it has in the past, with revenues expected to display 43% annualised growth until the end of 2022. If achieved, this would be a much better result than the 3.8% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 18% per year. Not only are Bata India's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

We also provide an overview of the Bata India Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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