Bata India Ltd, a Czech multinational footwear and fashion accessory manufacturer and retailer in India, has been a marked underperformer so far in 2021, but the recent price action suggests further upside in the next 2-3 months.

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Bata India with a market capitalization of more than Rs 27,000 cr hit a fresh 52-week high of Rs 2261 on 16 November but soon witnessed profit-taking amid a selloff in overall markets.

Investors who are already holding the stock should continue to remain invested as the momentum could take the stock towards fresh highs above Rs 2450 that translating into an upside of nearly 13 per cent from Rs 2173 recorded on 17 November, suggest experts.

Earlier in November, the shoemaker reported a consolidated net profit of Rs 37.18 crore for the second quarter ended September 2021 helped by an increase in sales from its retail outlets, e-commerce platforms and expansion drive of the company.

The company had posted a net loss of Rs 44.31 crore in the July-September period a year ago, Bata India said in a BSE filing.

On the institutional front, FII/FPI have increased holdings from 5.23 per cent to 5.35 per cent in Sep 2021 quarter while Mutual Funds have also increased their holdings from 15.45 per cent to 17.88 per cent in Sep 2021 quarter.

Technically, the stock has been traveling in a rising channel pattern since April onwards and has been trading in its 20-Day EMA vicinity.

The stock is trading well above its 30-Day Moving average since May 14 2021, Trendlyne data showed. It is trading above its short and long-term moving averages such as 50, 100, and 200-Day.

“In recent trading sessions, it has broken out of its band and now trading in an uncharted territory with indicators pointing to making new highs,” Vishal Wagh, Research Head, Bonanza Portfolio, said.
 
“The stock has been witnessing a higher high higher low formation and is likely to continue the said trend. ADX which indicates the strength of the trend is giving an uptick which means that the trend is set to resume and bulls are having a grip on this stock. Volumes suggest that the stock is seeing fair amount of traction,” he said.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)