BATAINDIANSEAugust 18, 2025

Bata India Limited

8,135words
91turns
11analyst exchanges
4executives
Management on call
Gunjan Shah
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER, BATA INDIA LIMITED
Amit Aggarwal
DIRECTOR FINANCE AND CHIEF FINANCIAL OFFICER, BATA INDIA LIMITED
Nitin Bagaria
AVP AND COMPANY SECRETARY, BATA INDIA LIMITED
Gaurav Jogani
JM FINANCIALS LIMITED
Key numbers — 40 extracted
33%
the overall store network from a turnover perspective. These stores have seen a line reduction of 33%. That is we have reduced the clutter piece. They have also seen an inventory reduction of almost
22%
. That is we have reduced the clutter piece. They have also seen an inventory reduction of almost 22%, so a significant return on invested capital for these stores, and are much better from an availa
450 basis point
m an availability perspective or size sets, etc., for the lines that we have kept there at almost 450 basis points. What does that result in is a much better consumer experience. The NPS scores are better. The
rs,
fficiently from a store manager perspective, which I have talked about for now the last two quarters, three quarters. We hope to continue this projection going forward and maybe even consolidate even
Rs. 399
I will just take you one of them and then we can extrapolate to the rest. Opening price points of Rs. 399 and rs. 499 were introduced at scale across almost 800 doors. Those price points resulted in check
rs. 499
take you one of them and then we can extrapolate to the rest. Opening price points of Rs. 399 and rs. 499 were introduced at scale across almost 800 doors. Those price points resulted in checkouts going f
3.5%
introduced at scale across almost 800 doors. Those price points resulted in checkouts going from 3.5% to 8%. The meaning of checkout in a better reference would be the average checkout of the full po
8%
ced at scale across almost 800 doors. Those price points resulted in checkouts going from 3.5% to 8%. The meaning of checkout in a better reference would be the average checkout of the full portfoli
4%
in a better reference would be the average checkout of the full portfolio of our network is about 4%, roughly. That is basically equivalent to 2x, so anything about 4% is better than average. Thes
2x
eckout of the full portfolio of our network is about 4%, roughly. That is basically equivalent to 2x, so anything about 4% is better than average. These portfolios show a checkout of 8%, right, an
Rs. 799
to expand this to almost a full network, which is close to 1,200 stores. A similar data point for Rs. 799 – Rs. 999, checkouts moving up to 6.4%, price points clearly demarcated. And then the network gett
Rs. 999,
this to almost a full network, which is close to 1,200 stores. A similar data point for Rs. 799 – Rs. 999, checkouts moving up to 6.4%, price points clearly demarcated. And then the network getting expande
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Guidance — 20 items
Gunjan Shah
opening
“And I will give you progress updates on all three of them going forward also.”
Gunjan Shah
opening
“There have been two large initiatives: the ZBM project, Zero Base Merchandising, that we are now scaling up pretty large; and the value proposition project, for driving same store growth.”
Gunjan Shah
opening
“We hope to maintain this progress of about 50 stores a quarter, and if things work out well, then maybe a little more accelerating.”
Gunjan Shah
opening
“We hope to continue this projection going forward and maybe even consolidate even better.”
Gunjan Shah
opening
“So, we now plan to expand this to almost a full network, which is close to 1,200 stores.”
Gunjan Shah
opening
“There are many more that are being worked upon on the value proposition, and hopefully allowing us to have a little more optimism going forward.”
Gunjan Shah
opening
“And there we plan to obviously extend this whole Power Easy Slide collection to the full network now and with a significant widening of the range.”
Gunjan Shah
opening
“We will want to see a reasonable split of almost, let us say, about 60% - 40% in terms of expansion going forward of COCO as well as franchise in this.”
Gunjan Shah
opening
“And there is a concerted project called Customer First, which is in this complete zone of end-to-end how do we improve this entire agility.”
Gunjan Shah
opening
“Despite that, our stock turns are better and our aged inventory has been significantly reduced to less than half, which should also portend well in terms of full price range going forward into the season.”
Risks & concerns — 4 flagged
We do sense stress even now in the mass segment, the middle and mass segment.
— Gunjan Shah
1,000 is where the stress is, and that is where we want to basically keep accelerating ourselves, while we push the premium part separately that I have talked about.
— Gunjan Shah
And once a brand loses mindshare, then taking it back becomes difficult.
— Sandip Sabharwal
However, the quantum of stores will be very difficult to project.
— Gunjan Shah
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Q&A — 11 exchanges
Q
Hi, Gunjan. My first question was with regards to the gross margins in the quarter around. We are seeing improvement in the contribution from the premium part of the portfolio. We are also seeing the quality of the merchandise, etc., improving. However, still we see that, the gross margins have declined. So, if you can highlight what has really led to this?
Gunjan Shah
Okay. Hi Gaurav. Thank you. No, your observation is right. Partially, the reason that has been there, especially in the last couple of quarters, would be on the lines of clearance of some of the inventory, not only aged, but also what we call as basically discontinued. And that is the process that we are now putting in much more stringency as part of what I have talked about as Customer First. But effectively, answering your question, I think a large part of is done. Now we are in a situation wherein we actually do not carry as much aged inventory or discontinued from that front, and especiall
Q
Hi, Gunjan, and thanks for taking my question. First question is on the margin front. Now, in the peak Bata, if I just look at a pre Ind AS basis, including the rental as part of other expenses, Bata made a 16% EBITDA margin a few years back. And last year it is finished at around 11%. There is some benefit of that royalty accounting here. Now, the company is hinting it is focusing more on the value part and that might be margin dilutive for some of the years. Internally, as an organization, is there a guardrail in terms of margin that this is the bottom and we will not allow the margin to go
Gunjan Shah
Okay. Sameer, so a couple of things, right? I am assuming what you are talking is at an EBITDA level, right? But I mean, in a very simple way, there are three large pieces towards this margin, right? One is obviously gross margin. The second one is, let us say, store related fixed costs, right, which are leverage coming from a same store growth. And the third one is corporate fixed costs, right, including manufacturing as well as corporate overheads. Are you with me till now? Yes. Yes. Okay. So, now, I will try and give you some commentary on it, while we do not give forward-looking guidance o
Q
I think we have lost him.
Management
Q
Hi. I have been attending your calls for the last many quarters. And each call, the outlook seems to be very bullish when you present itself. But when we come to the end of the quarter, the top line virtually is stagnating. And the brand Bata also does not resonate so well with the young generation of today. And secondly, there are a lot of B2C brands which have come up, which are doing reasonably well. So, what is aiding the company that despite so many initiatives, there is virtually no growth?
Gunjan Shah
Okay, Sandip. So, two, three things, right? Obviously, we also would like to see much better top-line. I think on a couple of fronts I mean, that I would like to respond on a slightly more macro level. One is that I think the consumer, especially in our target consumers, which is the middle class, probably the belly of the population, have obviously seen a certain pinch that is there in terms of the inflation that they have gone through. Now, making sure that they see value for money in our products, which we were known for, is something that we want to make sure that we consolidate and streng
Q
Hi, sir. Two questions from my side. First one will be, sir, we have slowed down our pace of implementing the Zero Base Merchandising. Like, as much I remember, you guided to implement this in 300 stores by end of this Q1. But we are now to 194 stores. So, any kind of hindrance which we are facing that you want to highlight?
Gunjan Shah
Okay. And what is your next question, Tanuj? Next question will be on margin, sir. As our franchise mix and e-commerce penetration is increasing, so how is this going to impact both the gross and EBITDA margins? How much dilutive both the things will be? No, at an EBITDA level, it is not dilutive. At a gross margin, it can play a little mix because of the way the business model is structured for it. And I have mentioned this in the past also. In fact, our franchise business actually is exceptionally accretive from an EBITDA business. So, I hope that addresses that, that it should be net accret
Q
Good evening, sir. So, my question is relating to the sneakers. So, at one point, we have introduced something like a Sneaker Studio. There was a lot of focus on that. So, what happened to that? I mean, for the last few quarters, we are not seeing any kind of growth there. So, what exactly is happening there?
Gunjan Shah
Okay. Avinash, so Sneaker Studio continues. I think we are now, at last count, close to almost about 800 stores out of the network with a Sneaker Studio now. The endeavor at that point in time, just to give you a context, was to make sure that the sneaker proposition from within the store is brought out, and which is why we put up the panel, and then for the Sneakers Studio concept was brought in. Now, the point is that now we see that we need to take this to the next level, and which is why the initiative is now on the portfolio that we are displaying under Sneaker Studio, and which is what n
Q
Hi. My question is on the COCO format now. It is been more than two years and expansion is extremely very slow. And I understand there has been a lot of store closures. So, how do we see this year as far as COCO format expansion is concerned? And what kind of store closures are we looking at?
Gunjan Shah
Right. So, I mean, it is a continuous process, Nirav, that happens in the retail world. And obviously, modulating based on basically same store growth in the environment that we see, then the net additions are an outcome of that in a way. But we still go on doing about roughly, in my view, about 70 to 80 gross additions that happen every year in COCO, gross, right? Now, depending on some of the consolidation initiatives that we are on, let us say, for example, in the last two, three quarters, there has been accelerated effort towards that. That will result in a net number that we are talking a
Q
-- it is impacting growth. Yes, this was just the last question.
Amit Aggarwal
In terms of-- So, I am saying that the closures also has been impacting the top-line growth. So, is this a final conclusive year or this will 50 - 50 stores will continue to close every year? See, it is an ongoing process, this is always going to be there, and any diligent retailer will have it. However, the quantum of stores will be very difficult to project. We as of now see a significant reduction in the pipeline that we see, right? I mean, let us say the red list that Amit was talking about, which is refreshed every six months, that is significantly lower versus, let us say, one year back,
Q
Thank you for the opportunity, sir. I wanted to understand the volume growth in this quarter and the ASP performance given all the initiatives taken and the hurdles faced.
Gunjan Shah
Yes. Just a second. Yes. Okay. Broadly, I think both of them have been flattish, Prerna, right? Largely driven by basically the fact that we had a disproportionate amount of impact in the first half of the quarter, especially in the IND business because of the conflict, etc., that we talked about. So, it is been broadly flattish on that front, allowing for the mix change, etc. Okay. So, sir, with all the initiatives taken, whether it is Zero Base for EBOs as well as focus on Power and Floatz and stuff, when do we see volume growth and revenue growth picking up? And how do we see internally on
Q
Yes. Good afternoon, sir. Thanks for the opportunity. Sir, with regard to your franchising network, which used to be close to 150 odd stores around COVID period and now 650 stores, what is, let us say, the throughput number, how has it moved over the years? And has there been a repeat in terms of the franchise has come back, or what proportion of these franchises have come back to open, let us say, another store with you, just to you success here? And the related question is, in terms of your Hush Puppies arrangement, is not there a mandate, let us say, get to a certain milestone number of sto
Gunjan Shah
Okay. All right. Thanks, Rajiv. Quickly on the franchise piece, franchise contributes to roughly around about 12% of turnover on a retail sales price level, right? Realization turnover, obviously, is a little lower because of the way we realize whole price on the DOS side, right, on the COCO side. The piece on repeat franchisees, we see more and more of it. Right now, if I last recollect, I think on an average, partner of ours has about 1.7 stores or 1.6 stores with us. But let us say, the additions that we are doing, about 60% of our additions are coming from existing partners. And we want to
Q
So, thank you, everyone, for joining. It was lovely interacting. Over to you, moderator and JM Financial.
Management
Speaking time
Gunjan Shah
31
Moderator
13
Nirav Savai
10
Amit Aggarwal
6
Avinash
6
Prerna Jhunjhunwala
5
Gaurav Jogani
4
Sameer Gupta
4
Rajiv Bharati
4
Nitin Bagaria
3
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Opening remarks
Gaurav Jogani
Hello, everyone. On behalf of JM Financial, it is my pleasure to welcome you all to Bata’s Q1 FY ’26 Earnings Conference Call. Today we have with us Mr. Gunjan Shah – Managing Director and Chief Executive Officer, Mr. Amit Aggarwal – CFO, and Mr. Nitin Bagaria – AVP and Company Secretary. Thank you and over to you, Nitin.
Nitin Bagaria
Good evening, everyone and welcome to the Bata Q1 FY’26 Earnings Conference Call. We have Gunjan Shah – MD and CEO. We also have Amit Aggarwal – Director Finance and CFO joining us. We have shared the presentation with the Stock Exchanges earlier today. We will be taking you through the same. We will navigate the slides as well as the page numbers. On Page #2, we have the disclaimer. I am sure you have gone through the same. I will now request Gunjan to take over and thank you once again for joining.
Gunjan Shah
Hi, everyone. Pleasure to be back on this call for this quarter. While overarching, the quarter was a relatively tough one. It seemed a little better than what we had seen in the previous quarter of Jan to March. But still, it resulted in only flattish kind of a growth, while we managed to have the operational efficiencies reasonably working for us. And it just goes on to show that the backbone of the P&L is strong enough. And hopefully, once we start seeing growth, led by the initiatives that we have talked about and hopefully pushing ahead, we should see this translating to much better profit growth also. Moving forward, I will try and keep consistency with what I have shared with you. On Slide #3, I am going to talk about three large initiatives. I have talked about them in the past. And I will give you progress updates on all three of them going forward also. And some of them I will inch towards the kind of plans that we have for the balance of the year in the next two quarters. St
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