- Bata India's Q2 FY26 results were below estimates due to GST 2.0 transition disruptions
- GST rate rationalization caused consumer and channel buying deferral impacting sales
- Company expects GST reduction to benefit lower price segment under Rs 1,000
Bata's recent performance was dismal owing to subdued volume offtake. The management has been prudent on implementing strategic initiatives for earnings revival.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
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.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
