IN ITS 94TH year in India, Bata is doing something very unlike Bata: it’s taking risks. The brand that generations grew up associating with brown sandals and bankable school shoes has, over the past few years, undergone what its MD & CEO, Gunjan Shah, calls a “360-degree transformation.” It’s an overhaul not just of product lines, but of how the company thinks, sells, communicates, and designs. “We’re rewiring the company,” Shah tells Fortune India. “We want to retain what makes us trusted but amplify where the consumer is headed.” Style, technology, and accessibility — he checks them off.

It is a work in progress, as the numbers show. In FY25, revenue remained nearly flat at ₹3,500 crore, up only 1% year-on-year. Gross margins contracted by 80 basis points (bps) to 56.3%. Operating profit (Ebitda) dropped 6% to ₹730 crore, while net profit was at ₹250 crore, down 15% YoY. The stock, meanwhile, saw a modest decline of 1.5% between April 1 and July 24.

“Bata is making considerable improvements across the business. But growth has been stagnant, with 3% CAGR over FY19–25. Excluding post-Covid pent-up demand, revenues in FY24 and FY25 have been flat,” says Udit Gajiwala, lead analyst at YES Securities. That said, he expects things to pick up gradually, forecasting a 5% revenue CAGR during FY25–27, though still lower than peers, including Campus and Metro.

However, the growth stagnancy has not hit the shoemaker’s morale. Bata is not shying away from new investments or chasing the younger, impatient, and harder-to-please consumer. It reduced gross inventory by 15%, pushed new merchandise to prepare for a demand rebound, and streamlined backend operations. As a result, Bata’s working capital days came down to 116 from 161 in FY24. Inventory days, too, have reduced to 195 from 227 a year ago. Free cash-flow post-leases jumped to ₹290 crore in FY25, up from negative ₹22 crore in FY24, driven by a tight capex cycle and improved operating cash flows of ₹360 crore.

“Despite continued market headwinds, Bata continues to pursue its strategy of driving volume-led growth,” Motilal Oswal’s research report reads.

Newer verticals are scaling up. Floatz, a casual footwear line born three years ago, is now on track to hit ₹200 crore in 2025; it posted a 2.9x growth in turnover and 2.6x rise in volume over Q4FY24 alone, states YES Securities. “It’s been our fastest brand to reach ₹100 crore,” Shah quips. “Consumers are no longer dressing for occasions. They want comfort with style that can move across contexts. That’s the space we’re now building for.”

With in-house developed Flow Foam technology, redesigned silhouettes, and backend manufacturing built around the Floatz line, casual styles today comprise around 60% of Bata’s product mix, up from 40% a few years ago.

Bata has launched ‘Red 2.0’, a redesign of retail spaces to remove clutter and reorganise inventory. “We’re now implementing zero-base merchandising (ZBM),” Shah explains. Introduced in 146 stores, ZBM has cut Bata’s inventory by 25% while improving availability, according to YES Securities.

“What you see in one store may be very different from another because the consumer is different. We’re building responsiveness into the system,” Shah says. Platforms like Blue Yonder are helping Bata push consumer feedback across the value chain, from shelves to supply. It is also betting big on the omnichannel strategy, including a recently piloted app, home delivery from stores, and curated digital-only collections. The digital blend has helped Bata retain the momentum it gained during Covid. “E-commerce has been our fastest-growing channel for five years,” Shah says.

Non-metro play

Metros drive the sales of high-ticket products such as Hush Puppies, with 150 exclusive brand outlets. But India’s fast-expanding smaller cities are synonymous with growth for Bata. Four years ago, in an early and aggressive push, it opened its store network to franchise partners in these markets. Now, it has around 600 franchises, mostly outside metros. As a result, Tier II and III cities have emerged as major growth engines.

“There’s been a silent migration from rural India to towns with 50,000–100,000 population,” Shah says. “These are the real demand centres now. They may not be ready for full-scale company-owned stores, but they want access to brands.” The franchise model lets Bata stay asset-light while expanding reach. In FY25, the company added around 100 stores, including 91 franchises. In Q4, nine stores were added, taking the total to 1,962. In FY26, the company targets more than 100 new stores, with 80% expected to be franchises. By FY29, Bata expects to nearly double the number of franchises to 1,000.

Premium, but not pricey

That said, Bata is not backing off from premiumisation. “It’s the way forward,” Shah says. But that doesn’t mean elite pricing, he clarifies. The Bata Comfort range, targeting working women, for example, sells at 1.5-2x of the average selling price at stores but remains accessible. “The goal is to democratise style and comfort,” says Shah. It reflects in marketing as well. The brand has sharply increased its digital media spending — from around 20% four years ago to nearly 70% now — by embracing influencer marketing. “For our last festive campaign, we had over 1,000 influencers from nano to macro,” adds Shah. “We even saw better engagement with creators like Prajakta Koli than with celebrities.”

Underpinning all this is a demographic pivot. “If India’s average age is 28-30, that’s our target,” Shah says. But that means shedding some baggage. “Heritage [styles] work in our favour, but we also need to look like we can sit beside new-age sneakers,” Shah adds.

Nearly 100% of its footwear is made in India. Bata recently commissioned its largest-ever manufacturing investment, a new Desma machine, at West Bengal’s Batanagar facility. Though policy clarity is awaited, it is engaging with the Centre on the production-linked incentive scheme for footwear manufacturing.

As Bata struts on, Shah says the biggest learning is that transformation isn’t merely a campaign. “It’s a mindset. And it’s not instant,” Shah says. “You need to know not just what to do, but also what not to do.”