Bata’s recent performance was dismal owing to subdued volume offtake. The management has been prudent on implementing strategic initiatives for earnings revival.
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IDBI Capital Report
Bata India Ltd.’s Q2 FY26 result was below our estimates on key parameters. The management cited GST 2.0 transition caused significant and acute disruption during the quarter, impacting the overall top line.
The period between the rate rationalization announcement and the effective date saw substantial consumer and channel partner deferral in buying.
However, the company anticipates structural benefits from the GST reduction, especially aiding the lower price point segment (below Rs 1,000) which has been under stress for the past two years.
Further, there is a structural shift in consumer behavior towards online platforms, leading to growth in e-commerce and directto-consumer (D2C) brands.
The management reiterated to focus on accelerating managing inventory, merchandising and decluttering initiatives.
Further, the company is cautiously optimistic about recovery towards balance of this year, backed by strong market positioning and wide network while maintaining strong focus on cost efficiencies.
Maintain Hold with a revised target price of Rs 1,092 (earlier Rs 1,147), assigning 50 times PER on FY27E.
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Also Read: Adani Power Q2 Review: Long-Term Outlook Remains Intact Says ICICI Securities Maintaining 'Buy'
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