Footwear major reports 2.9% revenue growth for the quarter ended December 31, 2025, driven by franchise expansion and digital channel performance, despite regulatory impacts from newly notified national labour codes.
Bata India Limited (NSE: BATAINDIA) reported revenue from operations of 9,446.81 million INR for the quarter ended December 31, 2025, representing a 2.9% increase year-on-year. The company’s performance highlights a strategic pivot toward inventory agility and customer experience transformation, which offset margin pressures and one-time regulatory costs. Consolidated profit for the period reached 661.02 million INR, up from 586.99 million INR in the same quarter of the previous year.
Key Development
The primary development during this period was the notification of national Labour Codes on November 21, 2025, which mandated a reassessment of employee benefits. This regulatory change, alongside an ongoing Voluntary Retirement Scheme (VRS), resulted in a combined exceptional expense impact of 79 million INR for the quarter. Additionally, the company is implementing a “Product Creation Funnel Reimagined” initiative, which has already reduced style complexity by 25% to focus on quality and scale.
Financial Performance
For the quarter ended December 31, 2025:
• Revenue from Operations: 9,446.81 million INR (up 2.9% YoY).
• EBITDA Margin: 24.7%, reflecting a 194-basis point improvement over the prior year.
• Net Profit (PAT): Grew by 13.7% YoY.
• Gross Margin: Stood at 5,290 million INR, a slight contraction of 77 basis points.
• Inventory Efficiency: Total inventory value was reduced by 11.7% (6,571 Mn INR vs. 7,448 Mn INR LY), while stock turns improved by 10%.
Business Outlook & Strategy
Management’s stated strategy involves five core pillars: Store Customer Experience, Inventory Declutter, Story Focused Marketing, Network Expansion, and a Reimagined Product Funnel. The company is prioritizing “Zero Base Merchandising” to enhance stock freshness, which has improved significantly for products under six months old. Future guidance includes a Product Development Phase in Q4’26 and Partner Consolidation for distribution products in early FY27.
Sector and Macro Context
Bata India operates as a single-segment entity in Footwear and Accessories. The company is navigating a broader industry shift toward “Sneakerization” and premiumization, evidenced by the performance of its Floatz and Hush Puppies collections. The digital landscape is a significant growth driver, with eCommerce sales expanding by 15% and the Bata.com platform growing by 45% year-on-year.
Regulatory Milestones and Segment Updates
A major regulatory milestone was achieved with the financial assessment of the 2019 Code on Wages and 2020 Social Security Code, resulting in a 66.66 million INR increase in gratuity and leave liabilities. In terms of segments, the company reached a total of 1,975 doors, with 670 franchise locations and a presence in 1,643 towns via multi-brand outlets (MBOs).
Business Model and Market Situation
Bata India utilizes a hybrid retail model comprising Company Owned Company Operated (COCO) stores, franchise doors, and a massive MBO network. Approximately 550 COCO stores are concentrated in the top 20 cities, while the franchise network has penetrated 646 unique towns. Digital sales now contribute significantly, with 40% of stores enabled for hyperlocal delivery with a 4-hour turnaround time.
Where Does Bata India Limited Stand Today?
The company is currently in a transformation phase, moving away from high-volume style complexity toward a standardized, quality-focused branding approach. While the stock faces headwinds from one-time exceptional costs, the structural improvements in inventory agility and franchise-led expansion provide a foundation for long-term operational efficiency.