Bata India Reports Flat Revenue, Margin Pressure in Q1

2 min read     Updated on 18 Aug 2025, 02:06 PM
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Reviewed by
Jubin VergheseBy ScanX News Team
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Overview

Bata India Limited reported flat revenue of Rs 942.00 crores for Q1, a 0.30% decline year-over-year. Gross margins fell by 133 basis points, with EBITDA margins at 22.90% and PAT margin at 5.50%. The company expanded its Zero Base Merchandising initiative to 200 stores, introduced new price points to address mass segment stress, and continued focus on casualization and premium brands. Bata added 20 franchise stores, totaling 644 outlets. Total inventory decreased by 16% year-on-year. Management cited challenges in the mass segment and multi-brand outlets but expressed cautious optimism about future growth initiatives.

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*this image is generated using AI for illustrative purposes only.

Bata India Limited , a leading footwear retailer, reported flat revenue growth for the first quarter, with margins facing pressure amid challenging market conditions. The company's performance reflects ongoing efforts to navigate a complex retail landscape while implementing strategic initiatives to drive future growth.

Financial Performance

Bata India reported revenue of Rs 942.00 crores for Q1, representing a marginal decline of 0.30% compared to the same period last year. The company faced margin pressure, with gross margins declining by 133 basis points. EBITDA margins stood at 22.90%, while PAT margin was 5.50%, down 112 basis points year-on-year.

Strategic Initiatives

Despite the challenging quarter, Bata India continued to push forward with several strategic initiatives:

  1. Zero Base Merchandising (ZBM): The company expanded its ZBM initiative to 200 stores, an increase of 50 stores during the quarter. These stores have seen a 33% reduction in product lines and a 22% decrease in inventory, leading to improved customer experience and operational efficiency.

  2. Value Proposition: Bata introduced new price points across various product categories to address the stress in the mass segment. For example, new price points of Rs 399.00 and Rs 499.00 in the Bata Ladies category saw checkout rates increase from 3.50% to 8.00%.

  3. Portfolio Evolution: The company continued to focus on casualization with its Floatz brand, which maintained a 30% growth momentum. The Power brand expanded in the athleisure segment, while Hush Puppies grew in the premium category, reaching 150 exclusive brand outlets.

  4. Franchise Expansion: Bata added 20 franchise stores during the quarter, bringing the total to 644 franchise outlets.

Inventory Management

Total inventory decreased by 16% year-on-year, despite a sequential build-up for the upcoming season. The company implemented a Customer First project to improve end-to-end inventory agility and forecasting.

Market Challenges

Management cited stress in the mass segment and sluggishness in multi-brand outlets as key challenges. The company also noted two exceptional items that impacted results: VRS costs for factory workers and a base year land realization of Rs 134.00 crores.

Outlook

During the earnings call, Bata India's management expressed cautious optimism about future growth. Gunjan Shah, Managing Director and CEO, stated, "We are hopeful that the initiatives that I have talked about will only gather momentum as we go forward. So, the lower price points less than Rs. 1,000 is where the stress is, and that is where we want to basically keep accelerating ourselves, while we push the premium part separately."

The company remains focused on driving same-store sales growth, expanding its franchise network, and improving operational efficiency to navigate the current market challenges and position itself for future growth.

As Bata India continues to adapt to changing consumer preferences and market dynamics, investors and industry observers will be closely watching the company's performance in the coming quarters for signs of a sustained turnaround in revenue growth and profitability.

Historical Stock Returns for Bata

1 Day5 Days1 Month6 Months1 Year5 Years
-0.95%+3.11%-6.51%-10.53%-20.31%-12.09%

Bata India Struggles with Persistent Revenue Misses and Stock Decline

1 min read     Updated on 16 Aug 2025, 09:04 AM
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Reviewed by
Riya DeyBy ScanX News Team
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Overview

Bata India is experiencing significant operational and financial difficulties. The company's stock has declined 9% in the past month, 19% year-to-date, and 20% over the past year. Revenue has consistently fallen short of estimates for 15 consecutive quarters, with growth below 3% for nine quarters. Competitors like Campus and Metro are showing stronger growth. Bata's total borrowings have increased, and its Return on Capital Employed has decreased. Despite a high PE ratio of 67x, analyst sentiment is predominantly negative, with 11 'Sell' ratings, 7 'Hold', and only 2 'Buy' recommendations. Key challenges include intensifying competition, failure to capture premium markets, weak online presence, and lagging retail experience.

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*this image is generated using AI for illustrative purposes only.

Bata India , a prominent footwear retailer, is grappling with significant operational and financial challenges, as reflected in its recent stock performance and financial metrics.

Stock Performance

The company's stock has experienced a notable decline across various timeframes:

  • 9% decrease in the past month
  • 19% decline year-to-date
  • 20% drop over the past year

Revenue Challenges

Bata India has consistently fallen short of revenue expectations:

  • Missed revenue estimates for 15 consecutive quarters
  • Most recent quarter: 4% below estimates
  • Previous quarters: Shortfalls of up to 7.4%
  • Revenue growth below 3% for nine quarters, often turning negative

Competitive Landscape

While Bata India struggles, competitors are showing stronger performance:

  • Campus: 11.5% growth in recent quarters
  • Metro: 10% growth in recent quarters

Financial Metrics

The company's financial health shows signs of strain:

  • Total borrowings increased from ₹1,094.00 crores in March 2022 to ₹1,446.00 crores in March 2025
  • Return on Capital Employed (ROCE) declined from 20.00% in March 2023 to 15.00% in March 2025

Market Valuation and Analyst Sentiment

Despite challenges, Bata India's stock maintains a high valuation:

  • Current PE ratio: 67x

However, analyst sentiment remains predominantly negative:

  • 11 analysts issue 'Sell' ratings
  • 7 recommend 'Hold'
  • Only 2 maintain 'Buy' ratings

Key Challenges

Bata India faces several obstacles in its path to recovery:

  1. Intensifying competition in the footwear market
  2. Failure to capture premium market segments
  3. Weak online presence
  4. Lagging retail experience

As Bata India navigates these challenges, investors and industry observers will be closely monitoring the company's strategies to reverse its declining trends and regain market confidence.

Historical Stock Returns for Bata

1 Day5 Days1 Month6 Months1 Year5 Years
-0.95%+3.11%-6.51%-10.53%-20.31%-12.09%
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