BATAINDIANSEJune 4, 2025

Bata India Limited

7,663words
100turns
10analyst exchanges
4executives
Management on call
Gunjan Shah
MANAGING DIRECTOR AND
Amit Aggarwal
DIRECTOR FINANCE AND
Nitin Bagaria
AVP AND COMPANY
Gaurav Jogani
JM FINANCIAL INSTITUTIONAL SECURITIES LIMITED
Key numbers — 40 extracted
rs,
n, Slide number 3, and also in line with the previous presentations over the last couple of quarters, I will focus on a few focused levers that we are consistently driving amongst the overall strategy
40%
focus area. Associated with this is that the number of lines in the store have dropped by almost 40%. The inventories have dropped by about 25%. What we measure as availability of various size sets
25%
he number of lines in the store have dropped by almost 40%. The inventories have dropped by about 25%. What we measure as availability of various size sets and articles has gone up significantly vers
300 basis point
bility of various size sets and articles has gone up significantly versus net of control by about 300 basis points. And the retrieval time as a key measure for customer experience and success is reduced to less
INR4,000
ke it even more attractive. And also, the Stamina+ collection, which is at a premium end at about INR4,000 MRP. And that has shown some good results in the first launch in the last quarter, and that's been
30%
le I talked about the ZBM stores, right, overall, across the network also reduced by almost about 30% year-on-year. The top articles, the way we look at it is that while we reduce the whole success o
12%
oth, then it's excellence on this front. So that has gone up. As you can see on the numbers, it's 12% better than where it was last year, despite significant reduction of availability and 7% better o
7%
s, it's 12% better than where it was last year, despite significant reduction of availability and 7% better on overall. The clutter at stores, so basically, the objective
16%
4 on inventory agility is more talking on financial terms. The inventory is a significant drop at 16%. This is over a continuing drop over the last almost now 5 quarters that we have managed to do. T
35%
also on the quality of inventory, which is what you see in the aged inventory that's about 30% to 35% lower. So, in that line and the potential that we see on this, we will -- I'll take you through S
INR1,000
time after a long time, we have started seeing some revival and contribution from the less than INR1,000 price point, which shows up in our volume growth, though we would have desired much more, so that
INR788 crore
ing, everyone. From a financial slide’s perspective, the overall revenue from operations stood at INR788 crores, which is a value decline of about 1.2% compared to the previous year same quarter. The gross ma
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Guidance — 20 items
Gunjan Shah
opening
“And we will have obviously some more campaigns coming across going forward.”
Gunjan Shah
opening
“And we expect that to unlock revenue growth for us going forward.”
Gunjan Shah
opening
“We still see some more meat going forward on this entire piece, not only in total quantity, but also on the quality of inventory, which is what you see in the aged inventory that's about 30% to 35% lower.”
Gunjan Shah
opening
“We have launched off a large transformation project with an external partner on what we call is Customer First, on how are we able to make sure that everything that we are doing through the organization comes through the value chain and impacts the consumer.”
Gunjan Shah
opening
“The project has already been kicked off, and we are looking at great benefits, so furthering already some initial signs that we have seen on this front that I shared with you in the last previous slides.”
Gunjan Shah
opening
“For the first time after a long time, we have started seeing some revival and contribution from the less than INR1,000 price point, which shows up in our volume growth, though we would have desired much more, so that we can also result that into revenue growth, which we are hopeful for going forward.”
Videesha Sheth
qa
“So how should we think of store addition momentum going forward?”
Gunjan Shah
qa
“It should be a little higher going forward, Videesha, right now as we look at it, right?”
Gunjan Shah
qa
“But it should be a little higher next year compared to the previous year that we've seen.”
Videesha Sheth
qa
“Or again, it will be a sample out of stores -- 146 stores?”
Risks & concerns — 6 flagged
We would also has started seeing some impact of this from a volume growth objective, but still a long way to go in my view of what would define success for this.
— Gunjan Shah
From a financial slide’s perspective, the overall revenue from operations stood at INR788 crores, which is a value decline of about 1.2% compared to the previous year same quarter.
— Amit Aggarwal
From a PAT perspective, overall, PAT stood at about INR46 crores, which is a decline of about 215 bps versus last year same quarter.
— Amit Aggarwal
So, if you can maybe quantify the impact of that and the rest, if there is any gross margin contraction, the reasons for that?
— Sameer Gupta
I understand the demand is weak, but you're obviously doing more premium, some automation focus, more efficient inventory management.
— Rahul Agarwal
This 80 days of inventory of sales, which you look at, does it further decline?
— Rahul Agarwal
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Q&A — 10 exchanges
Q
Sir, firstly, on the gross margin contraction this quarter, now I understand that increased franchising operations will also lead to some gross margin dilution. So, if you can maybe quantify the impact of that and the rest, if there is any gross margin contraction, the reasons for that?
Gunjan Shah
Okay. So, a couple of factors that contributed to it. One is obviously the mix. It's obviously franchise and e-commerce, as I mentioned in the past, does have a different implication on the way it flows through from a gross margin to EBIT level. But also, the fact that we have been consciously providing value proposition, while we are parallelly working towards resetting the cost structure for some of our lead products like the kind of example that I mentioned, Sameer, in my presentation. And that should pan out over the next -- so both of these are the things that have contributed to the gros
Q
The first question was that you ended the year with 100-odd stores being added. So how should we think of store addition momentum going forward?
Gunjan Shah
Yes. It should be a little higher going forward, Videesha, right now as we look at it, right? Obviously, as I mentioned, we would want to continue. And we've largely retained, which is about an 80-20 ratio between franchise and COCO. But it should be a little higher next year compared to the previous year that we've seen. Got it. And if you could just help with the revenue contribution of revenue mix from the key brands that you operate being Power, Hush Puppies, Comfit, etcetera? Okay. We don't share that, but basically, I would say that the second and the third largest brand after Bata, whic
Q
So, my question is with regards to this -- the lower other expenses this quarter. So, you did, I think, mention that there is some adjustment with regards to the license rights. So, if you can explain that a bit in detail and what exactly it is.
Gunjan Shah
Yes. I'll ask Amit to do this. Gaurav, in terms of -- see there is a change in the construct of one of our licensed brands. And in line with the earlier, the ex-royalty, what we were paying towards the usage of the brand was being charged as other expenses. However, in line with the India's requirement due to change in the structuring of the agreement, the same has been led to creation of an intangible asset, which you would see in the balance sheet side also. Therefore, once I create an intangible asset, the amortization and the financial liability of the same gets charged in the form of depr
Q
So, my first question is on the inventory. You're now introducing more of the Power products in the stores, which could be at a higher ASP. Two, we are reducing inventory in those stores of other products, which 2 years back was not there. Apparel was not there 2 years back in the store. So, what kind of the inventory are we reducing in the stores? So, I understand that clutter getting reduced. But what are these new products replacing in the store?
Gunjan Shah
Okay. So, there are 2, 3 pilots that are there on this, Ankit. Then, I mean, obviously, we can speak a long time because there's a lot of effort that's gone in. The results are now being seen, but it's been in the works for almost about a year, right? So, the first thing that there is, the one that I'm sure you can tangibly see is, reducing the aged inventory, which is basically to do with on 2 fronts, right? One is reacting fast on a slow- moving product. And the second one is to make sure that we are also ordering in the right manner. Right now, the technology of the Blue Yonder that we've i
Q
Gunjan, a couple of questions. Firstly, on this resetting of the business, that's the way I'm looking at it…
Gunjan Shah
Can you speak a little louder, Rahul? Yes. Yes, sure. Is this better? Yes. Okay. I was basically looking at Bata in terms of the entire resetting of this business. I understand the demand is weak, but you're obviously doing more premium, some automation focus, more efficient inventory management. From an investor perspective, what would you expect Bata to look like 3, 5 years out? When you are tangibly measuring success of these changes, how should we look at it? Specifically talk about financial metrics. How -- will the Bata look very different from what we are looking at today in terms of gr
Q
Sir, I'm on Slide number 14, the inventory reduction part. So -- and there, you mentioned that aged part, right? So, is it safe to assume that this 16.5% or the delta between the 2 is basically largely each inventory reduction?
Gunjan Shah
I can't mathematically do it, but the large part would be, which is what I mentioned to another gentleman on this call some time back, which is that there are multiple levers towards this inventory. I think the one that is the fastest and the most profitable is reduction of aged inventory, which is being proactive in slow-moving SKUs before it becomes aged as well as trying to be choiceful of what you bring into the stores, right? But there are other levers that I mentioned about. But my sense is, yes, some mathematics will show that a large part of this would have been aged. And the -- let's
Q
Am I audible?
Gunjan Shah
Yes, Vikram. So, apologies on repeating the question… Now your voice is inaudible. Vikram, can you speak a little louder? You said you are repeating the question. No problem. Tell us. Am I audible? Yes. So, I just wanted to get a sense of the opportunity that's arising from the implementation of the... Sorry. Surety on the implementation of? BIS norm. Your voice is coming and growing. Okay. Go on, go on. Yes. So, the -- what percentage of sales versus have been a few years ago? And going forward, what sort of opportunity that arises for local manufacturers? If you can just give me -- throw som
Q
No, we heard the question, Vikram. We heard the first question, yes. Yes. Okay. Vikram, so basically, we are 100% localized. There was a level of small amount, but I've given this commentary almost about 4, 5 quarters back when BIS was under transition. We had a seamless changeover, and we had almost no hiccups, except for maybe a few niche licensed brands, which also have now been sorted now. So, in fact, we are looking at this as an opportunity from an export’s perspective, which is what I commented on earlier to one other question. Does that answer your question?
Vikram Damani
Yes. Partly, what I actually wanted to gauge is the overall sort of supply. How much was the BIS supply to India, 5%, 10% of the overall market? Miniscule. It wasn't -- it was less than 5%, and that's now been eliminated.
Q
Just one clarification and advice. You have mentioned that the focus is on volume growth. If I look it in quarters back in the con-call, you were mentioning more of a premiumization as the strategy. Is there a shift in strategy or the volume growth will come and premiumization will also be with it? If you can just explain a bit on it.
Gunjan Shah
Yes, yes. No. So Udit, I think it's the latter of what you yourself mentioned right now, right? So -- and that's what my document or my presentation also was while you would have heard me at the start, right, that there is a consumer cohort, a large part of our target consumers who are looking for value proposition. And therefore, how do we make sure that we do it not only in the short term, but also in the medium-term structure is what we are working on. Some of the initiatives, I have shared with you all. But simultaneously, that doesn't stop us from bringing in technology innovation, brand
Q
Thank you, everyone, for joining once again. It was lovely interacting with you, as always. We look forward to connect again. Thanks.
Management
Speaking time
Gunjan Shah
39
Moderator
12
Gaurav Jogani
9
Rajiv Bharati
8
Rahul Agarwal
7
Vikram Damani
7
Amit Aggarwal
6
Videesha Sheth
5
Ankit Kedia
3
Sameer Gupta
2
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Opening remarks
Gaurav Jogani
Thank you. Hello, everyone. On behalf of JM Financial, it's my pleasure to welcome you all to Bata India's Q4 and FY '25 Earnings Conference Call. From the management, we have with us today Mr. Gunjan Shah, Managing Director and CEO; Mr. Amit Aggarwal, Director Finance and Chief Financial Officer; and Mr. Nitin Bagaria, AVP and Company Secretary. I would now like to hand over the call to the management. Thank you, and over to you, Nitin.
Nitin Bagaria
Thank you, Gaurav, and thank you, JM Financial team, for putting this together. Very warm welcome to all of you. I have with me Gunjan, MD and CEO; and also Amit Aggarwal, Director Finance and CFO. We have shared the presentation with the stock exchanges last week. We'll be taking you through the same. We'll navigate the slides as well as the page numbers to stay synchronized. On Page number 2, you have the disclaimer. I'm sure you have gone through the same. I'll now request Gunjan to take over and thank you once again for joining.
Gunjan Shah
Hi, everyone. Good morning. Welcome to the call. I will jump to the presentation, Slide number 3, and also in line with the previous presentations over the last couple of quarters, I will focus on a few focused levers that we are consistently driving amongst the overall strategy of driving growth profitably. Okay. So, the 3 levers, just for refresh, driving same-store growth, portfolio evolution on a few focused portfolio levers and the last one being inventory agility/complexity. So, we'll try and update you on the various initiatives and how that's been progressing. Within the store growth, there is Zero Base Merchandising. We made obviously some decent progress post the last quarter, where we were scaling up the pilot, and the second one was on driving value proposition in the stores. If you can just move to Slide number 5, you will see where we have tried to picturize what is the kind of change that we are trying to do through Zero Base Merchandising visually besides obviously the
Amit Aggarwal
Good morning, everyone. From a financial slide’s perspective, the overall revenue from operations stood at INR788 crores, which is a value decline of about 1.2% compared to the previous year same quarter. The gross margin were at about INR455 crores, while there is an erosion of about 230 bps versus the last year same quarter. EBITDA margin reported is at about 25.5%. The change versus last year is about 14 bps lower. Now in the EBITDA margin, there is a change in accounting for one of the licensed brands based on the Ind AS. Like-to-like EBITDA margin versus last year would have been about 23.5%. From a PAT perspective, overall, PAT stood at about INR46 crores, which is a decline of about 215 bps versus last year same quarter. Over to you, Gaurav.
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