diff --git a/erpnext/stock/doctype/batch/batch.py b/erpnext/stock/doctype/batch/batch.py
index 3c46fcb5aad..800d4f70c40 100644
--- a/erpnext/stock/doctype/batch/batch.py
+++ b/erpnext/stock/doctype/batch/batch.py
@@ -160,7 +160,9 @@ class Batch(Document):
 		from erpnext.stock.utils import get_valuation_method
 
 		if self.is_new():
-			if frappe.db.get_single_value("Stock Settings", "do_not_use_batchwise_valuation"):
+			if get_valuation_method(self.item) == "Moving Average" and frappe.db.get_single_value(
+				"Stock Settings", "do_not_use_batchwise_valuation"
+			):
 				self.use_batchwise_valuation = 0
 				return