Bata India (500043) Q1 24/25 earnings summary

Executive summary

• Q4 FY23 and Q1 FY25 saw a 1.4% year-over-year sales decline, attributed to subdued demand, external factors, and seasonality.

• Gross margin improved by 6 bps to 54.8% in Q1 FY25, with operational efficiencies and stable inventory management.

• Profitability was significantly boosted by a one-time gain from the sale of industrial land (Rs. 1,339.52 million/INR 1,340 Mn).

• Continued investments in IT, marketing, store expansion, and brand innovation, with focus on digital and franchise growth.

• Interim dividend of Rs. 10 per share declared for FY 2024-25, with a final dividend of Rs. 12 per share recommended.

Financial highlights

• Q1 FY25 standalone and consolidated revenue from operations was Rs. 9,446.34 million, up from Rs. 7,976.74 million and Rs. 7,978.71 million in Q1 FY24, respectively.

• Net profit for Q1 FY25 rose to Rs. 1,743.69 million standalone and Rs. 1,740.63 million consolidated, driven by the land sale gain.

• Gross margin increased to 54.8% in Q1 FY25.

• EBITDA margin at 35.5% and PBT margin at 23.0% in Q1 FY25, reflecting the exceptional gain.

• Marketing and IT costs increased, impacting other expenses.

Outlook and guidance

• Management targets a turnaround in sales momentum, with focus on portfolio evolution, digital expansion, and retail excellence.

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

• Targeting mid- to high single-digit same store sales growth in coming quarters.

• Final dividend of Rs. 12 per share recommended, subject to shareholder approval.