Bata India Ltd. (NSE:BATAINDIA) is a footwear manufacturing and retailing company based in India. It is a subsidiary of the global shoe brand Bata, which was founded in 1894 in Czechoslovakia. Bata India was founded in 1931 and has since become a leading footwear brand in the Indian market, with over 1,500 retail stores across the country. Bata India offers a wide range of footwear for men, women, and children, including casual shoes, sports shoes, formal shoes, sandals, and boots. The company also operates a number of accessories and apparel stores under the brand name Hush Puppies.
Bata India Ltd. reported a year-on-year (y-o-y) revenue growth of 7% to Rs. 900 crore in the third quarter of FY23, which was lower than expectations. This increase in revenue was driven by growth in products in the price range of over Rs. 2,000, while revenue from products in the price range of less than Rs. 1,000 declined. Overall volumes fell by 5% y-o-y due to sluggish demand in categories with lower price points. Despite inflation, Bata India’s gross margins remained strong at 54.8%, which was an improvement of 210 basis points y-o-y. The company continued to optimize its retail network and looked for cost savings. It opened 65 new stores in Q3, leading to a total of 2,021 stores in 563 cities.
Bata India also made significant progress on distribution expansion across categories and enhanced its portfolio in the casual and fashion footwear section. The company reported an 8.5% quarter-on-quarter (q-o-q) revenue growth and a 7% y-o-y revenue growth in Q3FY23. In terms of financial performance, Bata India’s total revenue increased by 6.2% y-o-y to Rs. 907.80 crore in December 2022. Operating profit increased by 22.2% y-o-y to Rs. 206.10 crore, while net profit increased by 15% y-o-y to Rs. 83.19 crore. Basic earnings per share (EPS) increased by 14.9% y-o-y to Rs. 6.47.
Overall, Bata India’s revenue growth in Q3FY23 was lower than expected due to sluggish demand in certain categories. However, the company’s gross margins remained strong, and it continued to optimize its retail network and expand its distribution. Bata India also made progress in enhancing its portfolio in the casual and fashion footwear section.