Bata India, a prominent footwear manufacturer, experienced a staggering 95.2% decline in consolidated net profit for the March quarter (Q4FY26), reporting just ₹2.2 crore. This significant drop is attributed to costs associated with a voluntary retirement scheme (VRS) and a foreign exchange-related accounting loss.
Sequentially, the profit decreased by 96.6%. The company incurred a VRS expense of ₹28 crore and a non-cash forex loss of ₹22.4 crore, resulting from the restatement of financial liabilities due to currency fluctuations.
In January, Bata initiated a VRS for employees at its Bata Shatak Unit in Hosur, Tamil Nadu, and has implemented similar schemes across several manufacturing units, alongside facility closures.
Despite these challenges, Bata reported a 4.9% increase in revenue, reaching ₹827.6 crore, driven by volume growth. The company noted that this marks the second consecutive quarter of accelerating revenue growth, with March's performance surpassing January's.
Investment in Growth: Gunjan Shah, managing director and CEO, highlighted that Bata is focusing on demand generation and consumer engagement, increasing advertising expenditures by 1.5 times.
Inventory Management and Future Goals
Bata has successfully reduced its gross inventory by 13%, indicating effective inventory management. The premium segment, featuring brands like Hush Puppies and Power, has shown stronger growth than the overall portfolio.
Management has expressed ambitions to generate approximately 25% of total revenue from digital channels within the next three years, aiming to attract a younger demographic.
The board has proposed a dividend of ₹9 per share during its recent meeting.
On the stock market, Bata's shares closed over 1% lower at ₹691 on the National Stock Exchange, reflecting a 45% decline over the past year.
