Bata India Limited announced results for the quarter ended 31st March 2022. Despite Omicron disruptions, backed by improved consumer sentiments in the latter part of the quarter, Revenue from Operations for the quarter stood at Rs. 6652 million and profit before tax was Rs. 844 million as against the profit before tax of Rs. 403 million in the quarter ended March 31, 2021, showcasing strong & sustainable recovery. For the year FY 2021-22, the company recorded revenue of Rs. 23,877 million and profit before tax of Rs. 1368 million against revenue in FY 2020-21 of Rs 17073 million and a loss before tax of Rs. 1177 million
Announcement of special Dividend
Bata India today announced that its Board of Directors has recommended a dividend of Rs. 54.5/- per equity share of face value Rs. 5/- each (i.e. 1090 %) which also includes a Special Dividend of Rs. 50.5/- per equity share, to be paid in August 2022, subject to approval at the ensuing AGM scheduled on 12th August 2022. Shareholders may refer to the Stock Exchange disclosure made by the Company. The total outflow on account of the same will be Rs. 7005 Million which would be funded through existing cash.
Sales ahead of pre-covid levels
The Company continued the focus on key thrust areas of franchise & MBO expansion, consumer-relevant communication, portfolio casualisation and digital footprint expansion. All these have resulted in an increase in footfalls across retail outlets, along with significant growth driven via e-commerce platforms and expansion in Tier 3-5 towns. This resulted in revenue for the quarter staying in line with pre-pandemic levels for a second consecutive quarter, despite Omicron related disruptions in the initial part of the quarter. This was offset in the latter part of the quarter when we saw a significant rebound on growth.
Key Highlights for the quarter:
- Continued investments in 3 large Marketing campaigns to inspire youth. Bollywood actress Disha Patani to run new casual collection campaign for women.
- Bata continued with its retail expansion drive in tier 3-5 cities through the franchise route, taking the overall tally to 300+ as on date.
- A large number of new sneaker studios have been launched across the country to display up to three hundred styles across 9 brands. Unlimited sneaker campaign to drive new portfolio leading increase in sneaker & casual style contribution in overall sales mix.
- Sales through digitally-enabled services continued its growth trajectory which was more than double of pre-covid levels.
- The Company continued to expand its Distribution Business in MBOs adding 42 towns.
- Won Loyalty Program award called “Champions of Champions” in The Customer Fest 2022
Focus on optimizing costs across the value chain
The Company continued to optimize its retail network and look for cost savings across rentals & operations, manufacturing, and drive efficiencies in its value chain. All the cost-focused initiatives, which have been put in place across multiple work streams continue to gain momentum and are showing impact quarter on quarter.
Mr. Ashwani Windlass, Chairman commented, “Bata India has had a robust performance and is on a sound trajectory ahead. Given its focus on newer collections, expansion through all channels and omnichannel in particular, Bata India is well poised for the future. Its new business model and focus is reflected in the quick retrieval of business to pre-pandemic levels and further growth.”
Returning surplus cash to shareholders in the form of this special dividend is an important and effective component of our capital management strategy; “This also reflects Bata India’s strong financial position and our confidence in the Company’s financial future,” Mr Ashwani further added, “Our free cash from operations and operating leverage remains at a significant level, which affords us the financial flexibility to grow our business organically and/or inorganically as appropriate”
Gunjan Shah, MD and CEO – Bata India Limited, stated, “In the last two quarters, we witnessed significant recovery in demand in the backdrop of improvement in consumer sentiments and deeper understanding of the pandemic, availability of vaccines and faster easing of restrictions. We kept expanding our reach through new franchise stores & multi-brand outlets. We opened 22 new Franchise stores taking the total number 300+, expanded availability via Distribution channel that continued to scale up to 1000+ towns. We have enhanced our portfolio in casual & fashion footwear section across categories. Sneakers led the growth recovery in the quarter while formal & fashion also recovered significantly. We continued upshift in marketing investments with campaigns like Unlimited Sneaker, Neo casuals for Neo Leaders and It’s Got to be Bata, 24×7 Casual Collection which strengthened our consumer connect for our brand.”
“Simultaneously, we continued our strong focus on cost-savings measures across our network, controlling discretionary spends, enhancing productivity and premiumisation in the face of volatile inflation. These measures have laid the foundation that will help us capture the emerging consumer demand efficiently. With scaling of above expansion/efficiency levers & rebound in consumer sentiments, we expect the momentum to continue towards pre-pandemic growth rate in the current quarter also as seen in quarter till date at 11% ahead of pre-covid levels, gross margins sustaining at 58% levels. Innovation via agile product creation, scaling up digital channels, expansion in Tier 3-5 towns, and productivity enhancement will continue to be a priority along with investments in our brands & stores,” added Gunjan Shah.