Risks
3 risks
Risk Intelligence
Sustained mass-market demand weakness
View Risks →Bata India Limited — Q1 FY26
Bata India reported a flattish Q1 FY26 with revenue of INR 942 crore (-0.3% YoY) and EBITDA margin of 22.9%, impacted by gross margin compression of 133bps due to inventory clearance.
neutral
medium
Financial stats pending filing verification
2-Minute Summary
✦ AI-Generated from Full Transcript
Bata India reported a flattish Q1 FY26 with revenue of INR 942 crore (-0.3% YoY) and EBITDA margin of 22.9%, impacted by gross margin compression of 133bps due to inventory clearance. Management highlighted progress on Zero-Based Merchandising (200 stores), value price points (e.g., INR 399/499 checkouts at 8%), and float growth (+30% YoY). However, revenue growth remains elusive amid weak mass-market demand and MBO sluggishness. Guidance points to 50 ZBM stores/quarter, 30-40 franchise stores/quarter, and stock turn improvement to 2.5x in 12 months. Key risk: sustained demand softness in the mass segment could delay top-line recovery.
बाटा इंडिया ने पहली तिमाही (अप्रैल-जून 2025) में लगभग पिछले साल जितनी ही कमाई की। कुल कमाई 942 करोड़ रुपये रही, जो पिछले साल से 0.3% कम है। कंपनी का मुनाफा (EBITDA मार्जिन) 22.9% रहा, लेकिन पुराने स्टॉक को सस्ते में बेचने से मुनाफे पर 1.33% का असर पड़ा। कंपनी ने बताया कि वह 200 दुकानों में नई तकनीक (ZBM) लगा रही है, सस्ते जूते (399/499 रुपये) बेच रही है, और फ्लोट चप्पलों की बिक्री 30% बढ़ी है। फिर भी, कमजोर बाजार और छोटी दुकानों की सुस्ती के कारण कमाई नहीं बढ़ रही। आने वाले समय में हर तिमाही में 50 नई ZBM दुकानें और 30-40 फ्रेंचाइजी दुकानें खोलने की योजना है। स्टॉक को बेचने की गति 12 महीने में 2.5 गुना तक सुधारने का लक्ष्य है। मुख्य जोखिम: सस्ते जूतों की मांग कमजोर रही तो कमाई बढ़ने में देर हो सकती है।
Risks3 trackedTranscriptfull text
Research workspace
Focused Modules
Transcript
Full text
Call Transcript
Full transcript text is available on this route.
Read Transcript →Quarter Snapshot
ZBM stores
200
+50 QoQ
Zero-Based Merchandising stores reached 200 in June 2025, adding 50 in the quarter.
Float growth
30%+
+30%+ YoY
Float category continues strong momentum with over 30% year-on-year growth.
Inventory reduction
16%
-16% YoY
Total inventory dropped 16% year-on-year, lowest June-end level in years.
Franchise stores
644
+20 QoQ
Franchise store count reached 644, with net addition of ~20 in the quarter.
What Changed vs Last Quarter
NEW
ZBM store expansion of ~50 stores per quarter
Management expects to convert about 50 stores per quarter to Zero-Based Merchandising, with potential acceleration to 65-70 if systems stabilize.
NEW
Franchise store additions of 30-40 per quarter
Franchise store expansion is expected to continue at 30-40 stores per quarter, with a long-term target of 130-150 net additions annually (80/20 franchise/COCO).
NEW
Stock turn improvement to 2.5x in 12 months
Management targets improving trailing 12-month stock turns from 2.1 to 2.5+ over the next 12 months through the Customer First project.
DROPPED
Store additions to be higher than last year
Management expects store additions in FY26 to exceed the ~100 stores added in FY25, with an 80:20 franchise-to-COCO mix.
DROPPED
Zero-based merchandising to cover 300+ stores by June end
Target to expand ZBM to ~300 stores by June 2025, covering ~45-50% of retail turnover.
DROPPED
Floats revenue expected to reach INR 200 crore this year
Floats brand revenue, which crossed INR 100 crore in FY25, is expected to double to INR 200 crore in FY26.
DROPPED
Continued inventory agility improvement
Inventory reduction and quality improvement will continue, with aged inventory targeted to reach best-in-class levels of 2-3%.
NEW RISK
ZBM rollout pace constrained by operational readiness
Management admitted that overly aggressive ZBM rollout caused temporary turnover dips, leading to a more cautious pace of ~50 stores/quarter.
NEW RISK
Store understaffing impacting conversion
An analyst raised feedback that Bata stores are significantly understaffed, which may lower conversion rates. Management acknowledged the issue but said it is being addressed.
RISK GONE
Gross margin pressure from channel mix and value investments
Shift towards franchise and e-commerce, along with value proposition initiatives, may continue to pressure gross margins.
RISK GONE
Execution risk in ZBM scale-up
ZBM rollout was behind initial target of 250 stores by Q4; scaling to 300+ by June may face challenges.
🤫 Topics management stopped discussing
Mentioned in Q3 FY25, Q4 FY25
Target to expand ZBM to ~300 stores by June 2025, covering ~45-50% of retail turnover.
Fast read
Guidance and risk preview
Management expects to convert about 50 stores per quarter to Zero-Based Merchandising, with potential acceleration to 65-70 if systems stabilize.
Management acknowledged continued stress in the mass and middle segment, which could delay top-line recovery despite value initiatives.
View Risks →