Bata India conducted its Q3 FY’26 Earnings Conference Call on February 13, 2026, discussing key performance highlights. Management reported turnover growth of about 3% this quarter, marking positive momentum. They emphasized the impact of the zero-based merchandising (ZBM) project, now scaled to 400 stores, and elevated, double-digit growth in marketing spend. Overall margins saw a 10% growth, supported by strong performance across channels.
Q3 and FY ’26 Performance Summary
The call was hosted by B&K Securities, with management including Mr. Gunjan Shah (MD & CEO) and Mr. Amit Aggarwal (CFO). Mr. Shah noted that this quarter delivered welcome turnover-led growth of about 3%, signaling momentum building after previous periods. This growth was attributed to the persistent implementation of the zero-based merchandising (ZBM) project, which has now scaled up to 400 stores.
Marketing expenditure has seen double-digit growth for the second consecutive quarter, and management expects to see continued results from this elevated spending. Underlying PBT growth was supported by various Customer First actions, leading to tangible improvements in inventory freshness and supply chain metrics.
Channel and Product Focus
Management highlighted strong brand performance, with Hush Puppies, Power, and Floatz driving disproportionately better growth. A significant turnaround was observed in the corner stores channel, which is now showing strong growth and margin performance. The franchise network is expanding rapidly, nearing the 2,000-store mark. Furthermore, the direct-to-consumer (D2C) business via the new Bata app now accounts for almost 14% of D2C sales within its first six months.
EBITDA for the period grew by approximately 200 basis points, reflecting well-rounded performance across all channels from a margin perspective.
Key Discussion Points
Zero-Based Merchandising (ZBM) Impact
The ZBM initiative, currently covering the top 400 stores, has shown a delta of around 5% versus the rest of the network. Management believes this delta is sustainable and expects to complete the ZBM agenda across the entire network this year.
Addressing Younger Cohorts
In response to concerns about lower recall among customers in their 20s, management noted that the average CRM age is around 31-32 years. Key initiatives to attract younger consumers include focusing on sneakers, elevating digital spend (moving toward social media influencers), and refreshing physical stores via concepts like Sneaker Studio and Bata Red 2.0.
Manufacturing Mix and Exports
The long-term strategy involves gradually reducing in-house manufacturing contribution from 30-35% (four years ago) to the current mid-teens. The focus for in-house production will remain on IPR-driven, technology-heavy, and large capex areas, while most other production shifts to contract manufacturers. Regarding exports, management confirmed that a dedicated sourcing hub has been established, and a significant jump over the next 2-3 years is targeted, building on a historical base of 700,000 to 1 million pairs annually.
Inventory and Working Capital
Mr. Amit Aggarwal confirmed that inventory efficiency improvements, achieved via the Project Customer First structural correction (reducing SKUs and improving demand prediction), are sustainable. The company aims for a further 25% reduction in aged inventory over the next two years.
Source: BSE
