Bata India (500043) Q2 25/26 earnings summary

Executive summary

• Focused on transformational customer experience, inventory declutter, store revamp, and product funnel reimagination to drive growth and agility.

• Significant investments in marketing and product innovation, with campaigns like Victoria Ballerina and Power Easy Slide showing positive results.

• Aggressive expansion through franchise and shop-in-shop models, targeting underserved markets and increasing store penetration in key cities.

• Expanded digital and physical presence, with Bata.com growing 25% year-over-year and digital sales contributing 5.1% of turnover via quick commerce in 25+ cities.

• Standalone and consolidated unaudited financial results for the quarter and half year ended September 30, 2025, were approved and reviewed by the Board and Audit Committee.

Financial highlights

• Revenue from operations for Q2 FY26 was INR 8,013.34 million, a 2.7% year-over-year increase; gross margin declined by 155 bps and EBITDA margin fell by 221 bps.

• Standalone net profit for Q2 FY26 was Rs. 137.59 million, and for H1 FY26 was Rs. 654.59 million, down from Rs. 2,267.31 million in H1 FY25 due to absence of prior year’s exceptional gain.

• Higher marketing investments, nearly double last year (3.5% vs 1.5%), and exceptional VRS cost of INR 83 million in Q2 FY26.

• Inventory reduced by 12.7% year-over-year to INR 7,215 million, with stock turns improving from 1.88 to 2.18.

• Cash and cash equivalents (standalone) as of September 30, 2025, stood at Rs. 77.77 million, down from Rs. 2,001.22 million as of March 31, 2025.

Outlook and guidance

• Targeting 2,000 franchise doors by December 2026, with over 200 new stores planned and coverage expansion to 1,635 towns and 14,800 MBOs.

• Expectation of margin recovery as one-off disruptions (GST, inventory clearance) subside and continued focus on inventory health.

• Continued focus on digital sales and accelerated rollout of zero-based merchandising.