Shares of Bata India declined nearly 3% in early trade on Tuesday after the footwear manufacturing company reported lower-than-expected earnings for the June quarter. The net profit of the company declined 70% year-on-year (YoY) due to weaker Ebitda, higher depreciation and amortisation expense, and finance costs.

Weighed down by Q1 earnings, Bata India shares dropped as much as 2.83% to ₹1,152.60 on the BSE, while its market capitalisation slipped to ₹14,885 crore. On Monday, the stock ended 0.53% lower at ₹1,186.25 apiece.

Bata India stock touched its 52-week high of ₹1,476.95 on January 6, 2025, and a 52-week low of ₹1,136.40 on April 7, 2025. The footwear stock has fallen 18% in a year, 14% in six months, and nearly 6% in a month. On a year-to-date (YTD) basis, the mid-cap stock has tumbled nearly 17%.

For the April-June quarter of FY26, Bata India reported consolidated net profit of ₹52 crore, down 70% YoY compared to ₹174 crore in the same period last year, dented by higher expenses, weak consumer demand, and an unfavourable high base effect.

Revenue from operations dropped marginally to ₹941.85 crore in Q1 FY26, from ₹944.63 crore reported in the year-ago period, due to headwinds relating to fluctuating weather patterns and geopolitical uncertainties. Premium brands such as Hush Puppies, Comfit, and Floatz showed resilience.

On the operating front, Ebitda rose 7% YoY to ₹200 crore as margins expanded 150 basis points (bps) YoY to 21.1%. Gross margins, however, contracted by 130 bps YoY to 53.5%, driven largely by 40 bps and 250 bps declines in employee costs and other expenses, respectively.

“Inventory efficiencies, both in terms of quantity and quality, continued to show strong progress. Initiatives are in place to improve stock turns and forecast accuracy to achieve an optimal level of inventory with significantly higher agility,” the company said in its earnings report.

During the quarter under review, Bata added 20 franchise stores, focussing on expansion into newer towns and semi-urban markets.

“The quarter witnessed headwinds accentuated by fluctuating weather patterns and geopolitical uncertainties. Amidst these and considering the demand trends, we pushed ahead with our affordability initiatives across categories to drive volume-based growth,” said Gunjan Shah, MD and CEO, Bata India.

“We continue to maintain a balanced approach between managing near-term challenges and investing in long-term growth drivers. We are optimistic about consumption recovery for the rest of this year, backed by our strong market positioning and wide network, while maintaining a strong focus on cost efficiencies,” he added.

Analysts’ view on Bata India Q1 performance

Post Q1 results, Motilal Oswal, in a report, said that Bata continued its voluntary retirement scheme (VRS) programme, incurring a one-time exceptional cost of ₹48 million. Adjusted for this, PAT stood at ₹56.8 crore, down 33% year-on-year and 21% below its estimates.

“Management is focussed on maintaining a balance between managing near-term challenges and investing in long-term growth drivers. It remains optimistic about consumption recovery in 2HFY26, backed by Bata’s strong market positioning and wide network, while remaining focused on cost efficiencies,” the brokerage said in its report.

JM Financial, in a report, said that revenue missed estimates and remained flat YoY due to headwinds relating to fluctuating weather patterns and geopolitical uncertainties. “Performance of premium brands like Hush Puppies, Comfit, and Floatz remained resilient in challenging demand conditions.”

“Initiatives are in place to improve stock turns and forecast accuracy to achieve an optimal level of inventory with significantly higher agility,” it added.

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