Bata India (500043) Q4 2008 earnings summary

Executive summary

• FY08 turnover reached Rs 10,123 million, up 14% YoY, with record results despite an economic slowdown and a fourth consecutive year of profitable growth.

• Restructuring, tighter cost controls, product improvements and store expansion supported stronger earnings and lower year-end bank borrowings.

Financial highlights

• Standalone net turnover was Rs 9,869.5 million vs Rs 8,674.8 million; PBT Rs 718.4 million vs Rs 551.5 million; net income Rs 607.4 million vs Rs 474.4 million.

• Standalone basic and diluted EPS rose to Rs 9.45 from Rs 7.38; management reported a 28% increase.

• Consolidated net turnover was Rs 9,877.3 million, PBT Rs 695.3 million and net income Rs 590.6 million; consolidated EPS was Rs 9.19 vs Rs 6.32.

• Other income included Rs 40.3 million of liabilities written back, Rs 37.7 million from brand disposal and Rs 28.9 million from impairment reversal; excluding these items, reported income included one-off gains.

Outlook and guidance

• Management expected non-retail sales to sustain a 14% annual growth rate for the next few years, with margins improving.

• Priorities included women’s and youth designs, product-mix improvement, cost control, manufacturing consolidation and wholesale transformation to support future profitability.

• Safety footwear was identified as a growth thrust, with potential demand across industrial, hospital, airline, defence and other specialist uses.