Bata India Reports Flat Revenue, Margin Pressure in Q1
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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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:
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.
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%.
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.
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 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
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-0.95% | +3.11% | -6.51% | -10.53% | -20.31% | -12.09% |