Footwear giants Bata India and Metro Brands are set for a substantial rise in share prices, according to Goldman Sachs Equity Research. The esteemed financial institution forecasts a remarkable 34% upside for Metro Brands, with a target price of Rs.1450, compared to its current trading value of approximately Rs.1,079.45. Similarly, Bata India Ltd, trading around Rs.1,325.55, is anticipated to witness an 8% uptick with a target price of Rs.1470.
The landscape of footwear retail is undergoing a significant transformation, with a notable shift towards branded footwear. Over the past decade, India has witnessed a decline in the market share of non-branded and alternative brands, dropping from 85% to approximately 75%. In line with global trends highlighted by Goldman Sachs, the top 15 brands are projected to capture 40–60% of the market share as the footwear industry expands. Consequently, organized multi-brand retailers like Bata India and Metro Brands are strategically positioned to capitalize on this rising brand penetration.
Goldman Sachs identifies the Sports & Athleisure (S&A) segment as a pivotal growth driver, presenting a multi-decade opportunity for expansion. Projections suggest a compelling 13% Compound Annual Growth Rate (CAGR) for India’s branded S&A footwear sector from FY25–45, with estimates ranging between 12% and 14%. The trajectory mirrors that of China’s footwear market in 2020, underpinned by similar macroeconomic drivers. Strategic alliances between global S&A brands and domestic retailers, such as Reebok’s partnership with ABFRL and Fila’s collaboration with Metro Brands, are expected to accelerate growth within this sector.
Goldman Sachs says that Metro Brands holds a strategic advantage over Bata India concerning key structural trends, notably premiumization and the proliferation of S&A products. While Bata India has undertaken initiatives to elevate its portfolio and bolster marketing efforts, the impact on growth remains to be fully realized. In contrast, Metro Brands is perceived as better positioned to leverage evolving consumer preferences and capitalize on emerging market dynamics.
To conclude the forecasted rise in share prices for Bata India and Metro Brands reflects the underlying optimism surrounding these footwear giants. With a strategic focus on multi-brand retail penetration and the burgeoning Sports & Athleisure category, both companies are set to navigate the evolving landscape of the footwear industry successfully. As investors eye the potential for substantial returns, the trajectory of Bata India and Metro Brands remains a focal point in the realm of equity investments.
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