Why Bata India’s profit fell 43% — and what’s next for the footwear major

Bata India’s September quarter numbers show a clear slowdown. The footwear giant posted a 43% year-on-year drop in consolidated net profit to ₹13.9 crore, even as festive demand began to trickle in late in the quarter. Revenue from operations declined 4.3% to ₹801.3 crore from ₹837.1 crore in the same period last year. So what dragged Bata’s performance — and is recovery on the horizon?

What led to the profit decline

The biggest hit came from the transition to GST 2.0, which disrupted demand across retail channels. The company said both customers and channel partners deferred purchases after the government announced GST rate rationalisation, leading to subdued sales through most of the quarter.

Managing director and CEO Gunjan Shah explained, “While overall Quarter 2 did have muted demand adversely impacted by the GST 2.0 transition, we are seeing positive signs of recovery this festive season post September 22.”

Adding to the strain was a temporary disruption in one of Bata’s largest warehouses in July 2025, which affected supply and led to a short-term business impact.

On the profitability side, margins took a knock. EBITDA fell to ₹166.4 crore from ₹191.8 crore a year ago, driven by higher markdowns for pre-festive inventory clearance and increased marketing spends to push premium products. Bata also booked a one-time expense of ₹8.3 crore related to a voluntary retirement scheme (VRS) at one of its factories, part of its broader strategy to streamline manufacturing and improve efficiency.

Even with the hit, the company is tightening operations. Shah said, “We continue to accelerate on managing inventory, merchandising and decluttering initiatives. In line with our long-term strategy towards bringing best-in-class efficiency standards, we have undertaken another VRS in one of our manufacturing units.”

What’s working for Bata

Moreover, despite the temporary dip, the company’s premium and fashion-led segments are showing resilience. Shah said, “Premium products showed robust growth in brands like Hush Puppies and Power. Our Victoria Ballerina campaign touched the right chords and attracted female customers, helping us gain an additional 1% in the sales mix. We also achieved the highest weekly pairage contribution from our Power Easy Slide collection.”

Bata’s Zero Base Merchandising Project, now scaled to 200 stores, has improved inventory efficiency and revenue per square foot. The company also added 30 new franchise stores during the quarter, strengthening its reach in smaller towns and semi-urban markets — a key focus area for future expansion.

What to expect going forward

The management remains “cautiously optimistic” about the rest of the financial year. Shah said, “We remain cautiously optimistic about recovery towards the balance of this year, backed by our strong market positioning and wide network while maintaining strong focus on cost efficiencies.”

With festive and wedding demand kicking in, and consumers responding well to fashion-forward comfort categories like ballerinas, slides, and athleisure wear, Bata expects volumes to stabilise in the coming quarters.

In short, a mix of GST transition pains, inventory adjustments, and one-off costs hurt Bata’s September quarter. But with consumer sentiment improving and the company betting big on premium and comfort footwear, the next few quarters could tell whether this slowdown was just a temporary stumble or a signal of changing dynamics in India’s footwear market.