Bata India (500043) Q1 24/25 earnings summary

Executive summary

• Q4 FY23 and Q1 FY25 saw muted sales, with a -1.4% year-over-year decline attributed to external factors and subdued demand, but digital and franchise channels outperformed.

• Portfolio evolution, digital expansion, and retail excellence were key focuses, with new brands and campaigns like Nine West and Try & Fly launched to attract younger consumers.

• Store network expanded to 1,916 doors by June 2024, with continued investments in store expansion, renovations, and marketing.

• Standalone and consolidated unaudited financial results for Q1 FY25 were approved, with statutory auditor review confirming compliance and no material misstatements.

• Interim dividend of Rs. 10 per equity share declared for FY 2024-25, with record date set for August 16, 2024, and payment from September 2, 2024.

Financial highlights

• Q1 FY25 standalone revenue from operations was Rs. 9,446.34 million, up from Rs. 7,976.74 million in Q1 FY24, with net profit at Rs. 1,743.69 million, compared to Rs. 1,078.42 million in Q1 FY24.

• Q1 FY25 gross margin improved by 6 bps to 54.8%, and EBITDA as a percentage of turnover rose to 35.5%, up from 24.1% in Q4 FY24.

• Exceptional gain of Rs. 1,339.52 million from sale of industrial land recognized in Q1 FY25.

• Marketing and IT costs increased, reflecting investments for future readiness.

• Standalone basic and diluted EPS for Q1 FY25 was Rs. 13.57, up from Rs. 8.39 in Q1 FY24.

Outlook and guidance

• Management is optimistic about a turnaround in sales momentum, targeting mid- to high single-digit same store sales growth in coming quarters.

• Plans to expand Power EBOs to 15 stores and Floatz kiosks to 30 by December 2024, and further scale Nine West presence.

• Targeting further digital sales growth and increased presence in multi-brand outlets, now covering ~1,550 towns.

• Final dividend of Rs. 12 per share recommended, subject to shareholder approval at the upcoming AGM.