Bata India Limited , a leading footwear retailer, has unveiled an ambitious growth strategy aimed at significantly boosting its revenue by the fiscal year 2027. The company has set its sights on achieving a quarterly revenue run-rate exceeding ₹4,500 crore, marking a substantial increase from its current performance.

Expansion and Premium Strategy

To reach this ambitious target, Bata India plans to implement a two-pronged approach:

1. Store Expansion: The company aims to add 900 new franchise stores to its network. This expansion is likely to focus on smaller towns and semi-urban markets, enhancing Bata's reach across India.

2. Premium Brand Mix: Bata intends to expand its premium brand offerings. This strategy aligns with the growing consumer demand for high-quality, fashionable footwear.

Financial Outlook

Bata India's financial projections include:

• Revenue Target: Quarterly revenue run-rate exceeding ₹4,500 crore by FY27.
• EBITDA Margin: The company expects its EBITDA margin to recover to 22% as consumer demand rebounds.
• GST Impact: Bata anticipates a normalization following the GST 2.0 transition, which is expected to positively impact its financial performance.

Recent Performance

The company's recent financial results reflect the challenges and opportunities in the current market:

All figures in ₹ million

• Exceptional Item: A one-time expenditure of approximately ₹83 million towards a Voluntary Retirement Scheme (VRS) at one of its manufacturing units.

Strategic Initiatives

Bata India is implementing several strategic initiatives to drive growth:

1. Zero Base Merchandising Project: Scaled to 200 stores, showing promising results in consumer experience and revenue per square foot.
2. Franchise Expansion: Added 30 franchise stores in the last quarter, focusing on smaller towns and semi-urban markets.
3. Premium Product Focus: Brands like Hush Puppies and Power are showing robust growth.
4. Product Innovation: The Victoria Ballerina campaign and Power Easy Slide collection have contributed significantly to sales mix and pairage contribution.

Market Outlook

Gunjan Shah, MD and CEO of Bata India Limited, expressed cautious optimism about the company's recovery, stating, "We remain cautiously optimistic about recovery towards balance of this year, backed by our strong market positioning and wide network while maintaining strong focus on cost efficiencies."

The company notes that early festive trends indicate steady demand recovery, particularly after September 22nd, following the initial impact of the GST 2.0 transition.

Bata India's strategic focus on premium products, store expansion, and product innovation, combined with its strong market position and wide network, positions the company to capitalize on the recovering consumer demand in the Indian footwear market.

Bata India Limited , a leading footwear and accessories company, has announced its unaudited financial results for the second quarter, revealing a significant decline in both revenue and profitability.

Financial Highlights

• Consolidated net profit fell 73% to Rs 23.80 crore, compared to Rs 51.98 crore in the same period last year
• Revenue declined 4.3% to Rs 801.00 crore from Rs 837.00 crore year-over-year
• EBITDA dropped 16.7% to Rs 145.00 crore
• EBITDA margin contracted to 18.1% from 20.8% in the previous year

The company's performance has fallen short of expectations, missing top line estimates for consecutive quarters. In the previous quarter, Bata India had reported a 70% drop in consolidated net profit to Rs 52.00 crore compared to Rs 174.00 crore in the corresponding period.

Factors Affecting Performance

The decline in revenue is attributed to several factors:

• Deferred purchases by channel partners and customers following GST rate rationalization announcements
• Lower gross margins from higher markdowns
• Increased marketing investments
• Temporary impact from warehouse disruption in July

Brand Performance

Despite the overall revenue decline, some of Bata India's premium brands showed resilience:

• Hush Puppies and Power brands performed well
• Victoria Ballerina campaign helped gain 1% additional sales mix
• Power Easy Slide collection achieved highest weekly contribution

Expansion and Optimization

Bata India continued its expansion efforts:

• Added 30 franchise stores
• Expanded Zero Base Merchandising Project to 200 stores
• Implemented a voluntary retirement scheme at one factory, resulting in an exceptional expenditure of Rs 83.00 million

Market Outlook

Management noted positive recovery signs during the festive season post September 22 and remains cautiously optimistic about recovery for the balance of the year. The impact of the GST 2.0 transition on demand is expected to be temporary as the market adjusts to the new tax structure.

The company's focus on premium brands and expansion strategies, coupled with the implementation of voluntary retirement schemes, indicates efforts to optimize operations and improve efficiency in response to market challenges.