Bata India posts surprise profit fall in fourth quarter as footwear demand wanes
HighlightsBata India reported a surprising 28 per cent decline in consolidated profit for the fourth quarter, falling to 459.2 million rupees, as sluggish consumer demand impacted sales. The company's revenue for the quarter decreased by 1 per cent to 7.88 billion rupees, underperforming analysts' expectations of 8.23 billion rupees, reflecting ongoing challenges in the Indian retail market. In contrast, peer Metro Brands exceeded profit expectations due to growth in its premium segment, while Relaxo Footwears experienced declines in revenue, profit, and footwear sales volume.
Footwear maker
Bata India
reported a surprise
fourth-quarter profit decline
on Wednesday, hurt by sluggish consumer demand as the
high cost of living
hurts household budgets.
The company's quarterly consolidated profit fell 28 per cent from a year ago to 459.2 million rupees ($5.4 million) while analysts expected a growth of around 5 per cent, according to data compiled by LSEG.
Bata, which also sells footwear brands such as
Hush Puppies
and
North Star
in India, said its revenue in the quarter dropped 1 per cent from a year ago to 7.88 billion rupees, lower than the 8.23 billion rupees expected by analysts.
KEY CONTEXT
Urban
consumer demand in India
remains weak due to the high cost of living and sluggish wage growth, with lower inflation in the fourth quarter offering little respite for consumer companies.
Bata has strived to maximize volume-led growth in recent quarters by reducing the number of price points offered in stores to ease decision-making for customers, analysts have said.
Peer
Metro Brands
beat fourth quarter profit expectations, benefiting from growth in its premium segment, while
Relaxo Footwears
reported declines in
quarterly revenue
, profit and volume of footwear sold.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts' sentiment months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth(%) growth(% rating* analyst price yield) s target** (%)
Bata India 50.76 19.63 8.48 7.62 Hold 10 0.96 1.49
Metro Brands 67.98 36.18 15.27 26.50 Buy 20 0.95 0.50
Relaxo Footwears 50.65 24.25 9.20 22.91 Hold 9 0.95 0.68
Campus Activewear 54.30 28.17 13.89 27.99 Buy 7 0.93
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
JANUARY TO MARCH STOCK PERFORMANCE
-- All data from LSEG
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