Bata India Q2 Results Review - Resilient Performance Amid Challenging Times: Axis Securities
Growth was driven by improved consumer sentiments on account of regional campaigns planned for festive season.
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Axis Securities Report
Bata India Ltd.'s Q2 FY23 topline was in line with our estimates with revenue of Rs 830 crore, registering a growth of 35% YoY. The growth was driven by improved consumer sentiments on account of regional campaigns planned for the festive season and higher realisations due to faster sneaker growth.
Bata India's Gross margins improved to 55% (up 209 basis points YoY), but gdown 163 bps QoQ on account of raw material inflation. The company’s Ebitda margins remained flattish YoY at 19.4% due to gross margin pressure and higher opex, partly offset by cost rationalisation measures undertaken by the company.
Ebitda stood at Rs 161 crore (23% below our estimates) on account of higher operating expenses. Recurring profit after tax stood at Rs 55 crore. Overall demand improved as schools, colleges, and offices operated at pre-Covid levels while Sneakers continue to lead the growth recovery.
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