Bata

Bata India receives GST demand order and penalty from Chandigarh Commercial Tax Officer for alleged ITC violations in FY 2021-22. Company confident of defending case.

The Supreme Court rejected petitions from Bata India, Liberty Shoes, and other footwear manufacturers challenging the Delhi High Court's July 2025 ruling that allowed Crocs Inc. USA's passing off suits to proceed. The case involves allegations that Indian companies copied Crocs' distinctive foam clog designs, with defendants arguing this creates a dual monopoly over features protected under both design and trademark laws.

Bata India Limited reported revenue of INR 8,000 million for Q2 FY26, marking a 4% year-on-year decline. The company attributed this drop to two major disruptions: GST rate transition from 12% to 5% on footwear and operational issues at their largest distribution center in Jamalpur covering 40% of inventory. Management estimates the company would have achieved flat revenue growth without these disruptions. Gross margins declined by 150 basis points compared to the previous year, though improved 190 basis points sequentially from Q1. EBITDA margins fell by 220 basis points, partly due to doubled advertising and promotional spending to 3.5% from 1.5% previously. The company continued its transformation initiatives including zero-based merchandising expansion to cities like Gurgaon and Mumbai, inventory decluttering with double-digit reduction, and franchise network growth approaching 700 stores from under 100 four years ago. Product portfolio shows 40% below INR 1,000, 40% between INR 1,000-2,500, and 20% above INR 2,500. Management reported improved consumer response post-September 22 when new GST rates became effective and expects structural benefits from the rate reduction on lower-priced products.