Bata shares fall nearly 4% after weak Q1 results

Although the company reported a 62.84% year-on-year (YoY) rise in Q1 net profit to ₹174 crore, it included a one-time gain of ₹134 crore from the sale of a property.

The total consolidated income for the quarter saw a decline of 1.08% YoY to ₹960.8 crore.

The earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter fell by 23% YoY to ₹184.9 crore.

At the end of June 30, 2024, Bata India reported an expansion in its network with a total of 1,916 Company Owned Company Operated (COCO) and franchise stores. The company also renovated 37 stores during the quarter with more focus on upgrading the portfolio.

Bata reported that its portfolio casualisation strategy performed well led by sneaker brand Power. The company also reported expansion in its Sneaker Studios and Floatz Kiosk.

The company opened 33 franchise stores during the quarter to expand in tier 3-5 towns. The move would help cater growing demand for branded products and also achieve better returns on capital.

Gunjan Shah, managing director and chief executive officer of Bata India, stated that the company faced sluggish consumer demand during the quarter along with adverse events such as the heat waves and general elections. The company managed to sustain its gross margins and had control over its costs.

“We sustained our gross margin with our premiumisation strategy while continuing investments in marketing and technology platforms,” he said.

The board of directors of Bata India recommended an interim dividend of ₹10 per equity share.

Shares of the company have declined by nearly 11% since the beginning of the year. The stock has lost over 17% in the past year.