Bata India share price dips 2% on poor Q2 results

Shares of Bata India dropped nearly 2 percent in early trade on November 9 after the company's announcement of a 38 percent decrease in its net profit for the second quarter (Q2), which amounted to Rs 34 crore. At 9:15 am, the Bata India stock was trading at Rs 1530.24 on the National Stock Exchange (NSE).

Bata India Ltd on November 8 reported a consolidated net profit of Rs 34 crore for the September quarter of FY24, registering a decline of 38 percent from Rs 54.8 crore a year back. The company's revenue stood at Rs 819 crore, falling 1.3 percent from Rs 829.7 crore in the year-ago quarter, the company said in a regulatory filing.

Earnings before interest, tax, depreciation and amortization (EBIDTA) for the quarter was at Rs 181.6 crore increasing by 12.9 percent. EBIDTA margin was at 22.2 percent and rises 280 basis points YoY. One basis point is one-hundredth of a percentage point.

"We continue to flesh out new opportunities across our value chain. We remain focused on cost efficiency across all operations including manufacturing facilities and optimizing our resources. In line with our strategy of sustainable profitable growth, we continue to expand across tiers in capital efficient manner, digital channels and make investments in elevating customer experience & brand marketing.” said Gunjan Shah, MD and CEO, Bata India Limited.

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During this quarter, the company continued its expansion efforts, operating a network of 30 stores in close to 25 cities, with both franchise and shop-in-shop (SIS) outlets contributing to over 39 percent of the company's presence. Notably, 54 stores underwent renovation, enhancing the overall shopping experience for customers. The company also successfully executed its portfolio casualization strategy by introducing the Sneaker Studio concept in 612 stores.

Also Read: Bata India Q2: Net Profit falls 38% to Rs 34 crore, revenue down 1.3%

Floatz business segment displayed remarkable growth, achieving a 70 percent increase, and expanded its presence by introducing the Floatz banner in 10 new stores. The company's commitment to strengthening consumer engagement was evident through the launch of various campaigns, including Casual Style, Bata Celebration, Monsoon, and School campaigns. Additionally, the implementation of the HPM merchandising project and the progress of the ERP project remained on track.

In a strategic move, the company signed a comprehensive licensing and manufacturing agreement with the globally renowned fashion brand Nine West, aimed at bringing on-trend fashion designs to Indian consumers. The company enhanced its casualization portfolio by commissioning the IMEVA capability in the Batanagar Unit. However, during the quarter, an exceptional item was recorded as the company initiated a Voluntary Retirement Scheme in one of its manufacturing units.

Brokerage firm Sharekhan has given a ‘hold’ rating to the Bata India stock with a target price of Rs 1750 in its research report dated August 11, 2023.

The Bata India stock has given a return of 3.72 percent over the last six months. The benchmark Nifty50 index has given a return of 6.45 percent over the same duration.