Bata India (500043) Q3 25/26 earnings summary

Executive summary

• Turnover grew by 3% year-over-year, with momentum returning after a period of stagnation and a focus on customer experience transformation, inventory decluttering, and network expansion to drive growth.

• Premium product lines and digital channels showed robust growth, with strong traction in volume and ASP, supported by strategic marketing campaigns and product funnel reimagination.

• Zero-Based Merchandising (ZBM) project scaled to 400 stores, driving improved metrics and efficiency.

• Marketing spend increased for the second consecutive quarter, supporting growth and brand visibility.

• Standalone and consolidated unaudited financial results for the quarter and nine months ended December 31, 2025, were approved and released, with no material misstatements identified.

Financial highlights

• Revenue from operations reached INR 9,447 Mn, up 2.9% year-over-year, with EBITDA margin up 200 bps and gross margin up 194 bps to 53.7%.

• Standalone profit before tax for Q3 FY26 was Rs. 887.47 million, up from the previous quarter and year-over-year.

• E-commerce contributed a mid-teens percentage to total revenue, growing at 15% last quarter, with Bata.com up 45% year-over-year.

• Inventory efficiency improved, with aged inventory at an all-time low, a 25% reduction over two years, and stock turns improving from 2.11 to 2.30.

• Exceptional costs included VRS and labour code impacts totaling INR 79 Mn in Q3'26.

Outlook and guidance

• Continued focus on expanding ZBM to the full network, inventory efficiency, customer experience, and digital expansion expected to support future growth.

• Ambition to surpass 2,000 franchise stores and 1,000 KRO network stores in the near term.

• Exports expected to see significant growth over the next 2-3 years, leveraging new FTA and global synergies.

• Strategic reinvestment in product development and network expansion planned for upcoming quarters.

• The company continues to monitor the impact of new labour codes and will evaluate further implications on employee benefits.