Aligning with the current demand scenario, Bata has tweaked its product portfolio from formals & Fashion categories to Casuals, Fitness, & Essential categories covering comfortable sneakers, open & sandals styles. This has led to faster pick up in volumes that reached 88 per cent of pre-Covid levels.
"Owing to decline in Covid cases and vaccine rollout, the overall market sentiment is improving significantly. Backed by good festive sales and our targeted consumer outreach, our sales have recovered to 74 per cent of pre-Covid levels,” the management said.
The management further said it continued to double-down on its focus on cost-savings measures by working closely with landlords for store rentals optimization, controlling discretionary spends and looking for productivity-enhancing measures. The company opened a total of 45 new franchise stores in the quarter, taking its total to 221 Franchise stores.
"Bata continues to penetrate in newer towns through franchise operated stores. Formal and fashion footwear demand is likely to remain muted in the near term due to fewer social gatherings. Unfavourable product mix (shift towards casual category) may lead to deterioration in gross margins in the near term. However, cost rationalisation initiatives will benefit the company over the longer term," ICICI Securities said in a note.
The brokerage firm believes that with its strong brand patronage and pan-India retail reach, Bata India
should be able to revive its revenue growth trajectory as and when the impact of the Covid-19 is phased out.
At 10:28 am, Bata India
was trading 4 per cent lower at Rs 1,509 on the BSE, as compared to a 0.28 per cent rise in the S&P BSE Sensex. Trading volumes on the counter jumped an over four-fold with a combined 2.6 million equity shares changing hands on the NSE and BSE till the time of writing of this report.
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