Bata India reported its Q2 FY26 results, impacted by GST transitions and RDC operations. Despite a revenue decline of 4% YoY, the company is focused on inventory decluttering, enhancing store experiences, and strategic marketing investments. Key initiatives include Zero-Based Merchandising (ZBM) and expansion in franchise stores. The company aims for improved margins and growth through a mix of volume and value strategies in the medium term. Revenue stood at INR 8,000 million.
Financial Performance
Bata India’s revenue from operations stood at approximately INR 8,000 million, reflecting a decline of about 4% compared to the same quarter last year. The decline was attributed to GST transition and RDC operations. However, gross margin decreased by about 150 basis points versus last year, but improved by 190 basis points sequentially compared to Q1 FY26. The A&P investments nearly doubled, reaching almost 3.5% of revenue compared to 1.5% in the previous period, with intentions to sustain this investment level.
Strategic Initiatives and Outlook
The company is focused on several strategic initiatives including inventory decluttering, enhancing store experiences, and making targeted marketing investments. Zero-Based Merchandising (ZBM) remains central to enhancing customer experience and decluttering stores. Franchise stores have expanded from less than 100 to nearly 700, providing access to unique towns. The company aims to increase its run rate and sees significant expansion possibilities.
Product Portfolio and Future Plans
Bata is reimagining its product funnel with a focus on bringing more science and rationale behind new product introductions and seasonal carry-overs. The strategy includes a pyramid approach to maximize control on comfort and technology while achieving economies of scale. Premiumization will be driven by select product categories, with Hush Puppies serving as a premium driver. The company aims to balance both volume and value growth, emphasizing the importance of full-price sales and clear inventory management.
Channel and Expansion
Bata is expanding its network through franchise stores, and Shop-in-Shop (SIS) commerce stores in large departmental and high throughput areas. Franchise partners are being encouraged to operate multiple stores in clusters. The company is also penetrating cities, aiming to paint entire cities for full-scale benefits. The company also introduced VRS in Bata Nagar to remove legacy cost structures.
Source: BSE
