ICICIdirect has maintained 'Hold' on Bata India with target price of Rs 1,225 as against current market price (CMP) of Rs 1,255 in its report.

Commenting on the investment rationale, the stock broker said, "The Union Budget announced yesterday, the Finance Minister decided to reduce the excise duty on footwear from 12% to 6%. Footwear of retail price up to Rs 500 per pair will continue to remain exempted while that above Rs 1,000 will continue to attract a duty of 12%. Currently, Bata pays 1.6% of its gross sales as excise duty. Our back of the envelope calculations indicate the excise duty cut could lead to 1-2% increase in the EPS and, hence, is not very significant from a financial perspective. However, this move could mean that the mass category of footwear could witness a 2-3% price cut.

Hence, it could lead to a volume push for footwear retailers, in general. While we have not made any changes to our earnings estimates, we continue to maintain our positive stance on Bata India and recommend that investors continue holding the stock."

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