Bata India Limited showcased signs of recovery in its Q3 FY26 earnings conference call held on February 13, 2026, reporting its first positive revenue growth after several challenging quarters. The footwear retailer achieved a 3% turnover-led growth, accompanied by significant margin improvements and operational efficiencies.

Financial Performance and Key Metrics

The company delivered strong financial results with notable improvements across key performance indicators:

Managing Director and CEO Gunjan Shah attributed the performance to persistent implementation of strategic initiatives, particularly the zero-based merchandising project and elevated marketing investments for the second consecutive quarter.

Zero-Based Merchandising Expansion

The zero-based merchandising (ZBM) initiative emerged as a key growth driver, now scaled to 400 stores across the network. This customer-centric approach showed measurable improvements in critical operational metrics:

• Enhanced inventory turns and product availability
• Reduced turnaround time for store resupply
• Improved consumer choice curation
• 5% performance delta versus non-ZBM stores

The company plans to expand ZBM to its entire network by the end of FY26, with management expressing confidence in the scalability and impact of this initiative.

Brand Performance and Product Strategy

Several brands demonstrated strong performance during the quarter, with Hush Puppies, Power, and Floatz driving disproportionate growth. Hush Puppies, contributing approximately INR 700 crores in retail business and representing 15% to 20% of retail store sales, continues its expansion trajectory.

The company emphasized its focus on product authority and design innovation, with significant investments in reimagining the product creation funnel to enhance consumer appeal and market positioning.

Channel Expansion and Digital Growth

Bata India's multi-channel strategy showed positive momentum across various touchpoints:

Franchise Network:

• Current count: Nearly 2,000 outlets
• Target: 1,000+ stores in next couple of years
• Focus on Tier 3 markets and smaller suburbs

E-commerce Performance:

• Growth rate: 15% in Q3 FY26
• Revenue contribution: Mid-teens percentage
• Bata app launch: 14% of D2C business within 6 months
• Key retail outlets (KRO) network: 2,000+ reach

The corner stores channel, after a year-long rationalization process, demonstrated significant turnaround with both growth and strong margin performance, positioning it as a key growth lever for future quarters.

Operational Improvements and Future Outlook

The company achieved substantial operational efficiencies through its Customer First project, resulting in:

• 25% inventory reduction over two years
• All-time low aged inventory levels
• Improved freshness and availability
• Science-based demand prediction implementation

Management consolidated contract manufacturing partners from 120+ to 60, with plans to further rationalize to 15 partners for better quality control and innovation leverage.

Manufacturing and Export Strategy

Bata India's manufacturing strategy focuses on maintaining in-house production for technology-driven, automated, and high-capex products while outsourcing labor-intensive manufacturing. The company established a dedicated sourcing hub supplying both domestic and global Bata operations.

Export ambitions received a boost from recent FTA agreements, with management indicating significant expansion plans from the current 700,000 to 1 million pairs annually, though specific targets will be shared in upcoming quarters.

The quarter's performance reflects Bata India's strategic transformation efforts gaining traction, with multiple initiatives contributing to improved financial metrics and operational efficiency. The company's focus on customer-centric merchandising, digital expansion, and product innovation positions it for sustained growth momentum.

Source: Bata India Limited Q3 FY26 Earnings Conference Call

Bata India Limited reported its unaudited financial results for the quarter and nine months ended December 31, 2025, showing improved quarterly profitability despite facing headwinds in overall revenue performance. The footwear major demonstrated resilience with strong quarterly earnings growth while managing operational challenges. Subsequently, the company uploaded the audio recording of its post-earnings conference call held on February 13, 2026.

Quarterly Financial Performance

The company delivered solid quarterly results with consolidated profit increasing substantially year-on-year. Revenue performance remained relatively stable despite market challenges.

The company's quarterly revenue from operations of ₹9,446.81 million represented a 2.8% increase compared to ₹9,187.94 million in the corresponding quarter of the previous year. Total income reached ₹9,657.23 million, including other income of ₹210.42 million.

Nine-Month Cumulative Results

The nine-month performance reflected the impact of exceptional items from the previous year, particularly the significant land sale gain that boosted prior year comparisons.

For the nine months ended December 31, 2025, revenue from operations declined marginally by 0.5% to ₹26,878.69 million from ₹27,005.72 million in the previous year. The significant decline in nine-month profit was primarily attributed to the absence of exceptional gains that benefited the previous year.

Exceptional Items and Special Charges

The company incurred several exceptional expenses during the reporting period, impacting overall profitability. These items primarily related to organizational restructuring and regulatory compliance.

During the quarter ended December 31, 2025, the company incurred ₹12.59 million in expenses related to voluntary retirement schemes at manufacturing units. Additionally, the implementation of new labour codes resulted in a one-time charge of ₹66.66 million due to increased gratuity and leave liabilities.

Post-Earnings Conference Call

Following the earnings announcement, Bata India conducted a post-earnings conference call on February 13, 2026. The company has uploaded the audio recording of this call on its website under the investor relations section. The recording is available at the company's disclosure page under SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

The company confirmed that no unpublished price sensitive information (UPSI) was shared during the conference call, maintaining compliance with regulatory requirements.

Operational Metrics and Business Segment

Bata India operates in a single business segment focusing on footwear and accessories. The company maintained its market position while managing cost pressures and operational challenges during the quarter. The paid-up equity share capital remained stable at ₹642.64 million with a face value of ₹5 per share.

Recent Developments

Subsequent to the quarter ended December 31, 2025, the company implemented an additional voluntary retirement scheme at one of its manufacturing units, incurring an expense of ₹280.60 million. The Government of India notified new labour codes on November 21, 2025, consolidating twenty-nine existing labour laws into a unified framework, with the company recording the financial impact as an exceptional item.