Bata shares decline over 3% after 10% drop in June quarter PAT

Bata India shares dropped more than 3 per cent in intraday trade on Thursday after the company reported a set of weak financial results for the June 2023 quarter. The company saw marginal gain in revenue while profit after tax (PAT) dropped year-on-year and the key indicators missed the Zeebiz estimates.

The company attributed lower profits to the early start of End of Season Sale in the footwear industry and the subdued demand in the footwear market. The company also continued to scale up its distribution and logistical operations in the quarter.

Bata India June financial results

The company reported its total consolidated revenue for the quarter ending June at Rs 958 crore, a marginal 2 per cent year-on-year increase compared to Rs 943 crore in Q1FY23. However, the revenue fell short by 7 per cent of the Rs 1,029 crore estimate set by Zee Biz.

Profit after tax declined by 10 per cent to Rs 107 crore as against Rs 119 crore reported in the corresponding quarter of the previous financial year. PAT was 16 per cent lower than the Zee Biz estimates of Rs 127 crore.

The shoemaker’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) also declined marginally 2 per cent YoY from Rs 244 crore to Rs 239 crore. The estimated EBITDA for Bata India in Q1FY24 was Rs 265 crore.

Gross margins declined 180 basis points to 54.8 per cent as against 56.6 per cent reported in Q1FY23. Operating margins also declined by 100 basis points to 24.9 per cent, which was lower than Zee Biz estimates of 25.9 per cent.

Current Trends

The shares of the company were trading at Rs 1651 apiece, down 2.88 per cent, on BSE at 2:21 PM

The company’s share price has declined by nearly 4 per cent over the previous week. Despite a recovery in prices since the start of the financial year, Bata’s share price is still down by over 11 per cent over the past year-long period.