Bata India surges 10% after naming Nike veteran Sanjay Rao as next CEO

Shares of Bata India climbed 9.94% to an intraday high of ₹745.95 on Thursday after the footwear maker named former Nike executive Sanjay S. Rao as its next managing director and chief executive officer, with investors appearing to bet that the global retail veteran can accelerate a turnaround strategy that is already showing early signs of traction.

The company informed exchanges on June 18 that Rao would join as whole-time director and chief executive officer from August 24 and assume the role of managing director and CEO from October 1, following the completion of incumbent CEO Gunjan Shah's five-year term. Bata said Shah would remain in office until September 30.

Rao joins from Nike, where he most recently served as senior director, Nike Retail, overseeing the France and Benelux markets. Before that, he spent more than 15 years with Inditex, helping establish Zara's India business through its joint venture with the Tata Group before taking on leadership roles across South Asia and China.

Management signals next phase of growth

The appointment comes just over two weeks after Bata's June 1 investor presentation, where management outlined a plan centred on retail expansion, digital growth, inventory rationalisation, premiumisation and stronger brand investments.

In the leadership announcement, Bata Group CEO Panos Mytaros described India as "one of Bata Group's most important markets and one of our biggest long-term growth opportunities."

"The next chapter must be about becoming even closer to consumers, strengthening our relevance, responding faster to trends and giving consumers the shoes they want for every part of their lives," he said.

Bata India chairman Ashwani Windlass said Rao's "versatile background, proven track record and deep understanding of consumer and retail markets" would help lead the company into its "next phase of growth, with a strong focus on consumer relevance, product strength and long-term value creation."

Operational metrics show improving traction

While Bata's FY26 earnings remained under pressure, several operational indicators highlighted in the June 1 investor presentation pointed to improving business momentum.

For the March quarter, revenue rose 5.1% year-on-year to ₹827.6 crore, while volumes grew 2.8%. E-commerce sales increased 26%, with Bata.com registering 81% growth. The company also expanded its reach to 1,660 towns through more than 15,000 multi-brand outlets and nearly 2,000 stores nationwide.

Bata has also been executing a large inventory clean-up programme. Inventory declined 28% year-on-year, stock turns improved to 2.43 times from 1.99 times a year earlier, and product availability improved by 950 basis points. Full-price sales rose to 86.8%, indicating lower discounting and improved merchandise productivity.

The company has simultaneously increased its focus on premium categories such as Hush Puppies and Power, while significantly stepping up marketing investments. Advertising spends during the quarter were 1.5 times higher than a year earlier, and brand consideration improved to 66 from 60 two years ago.

Investors look beyond weak earnings

The market's reaction suggests investors were willing to look past a weak FY26 earnings performance and focus instead on the company's ongoing transformation efforts.

For FY26, Bata reported a 59.3% decline in net profit to ₹133.56 crore, while revenue from operations rose marginally. The March quarter was impacted by a ₹28.1 crore voluntary retirement scheme charge and foreign exchange-related losses.

Against that backdrop, the appointment of a retail executive with experience at Nike, Zara and Guess appears to have reinforced investor confidence that Bata's next phase will be driven by faster product cycles, stronger consumer engagement, premiumisation and digital expansion.

Bata India shares have fallen over 38% during the past year, underperforming the Nifty 500 index that has risen nearly 1% during the same period.