Bata India Shares Extend Rally with 8.4% Surge to Four-Week High
Shares of Bata India continued their upward trajectory for a second consecutive session on Tuesday, February 10, climbing an impressive 8.4% to reach a four-week peak of ₹958.55 per share. This significant rally was a direct response to the company's December quarter results, which aligned with market expectations and showcased a resilient performance amidst economic fluctuations.
Q3FY26 Financial Performance Highlights
After market hours on Monday, the footwear giant released its Q3FY26 financials, revealing a 3% year-on-year increase in consolidated revenue from operations to ₹944 crore. This growth was primarily fueled by robust demand during the festive and wedding seasons, coupled with the beneficial impact of a reduction in Goods and Services Tax (GST) on footwear.
In September of the previous year, the government slashed GST on footwear priced below ₹2,500 from 12% to 5%. Previously, this lower tax rate applied only to shoes costing up to ₹1,000, making the new policy a substantial boost for affordable footwear segments.
Operational and Profitability Metrics
On the operational front, Bata India reported an EBITDA of ₹212 crore, marking a 6% year-on-year rise. The EBITDA margin expanded by 70 basis points to 22.4%, driven by a notable 140-basis points contraction in other expenses. However, this was partially offset by a 50 basis points increase in employee costs and a 20 basis points decline in gross margin, which settled at 56%.
The bottom line showed even stronger improvement, with net profit soaring 13% year-on-year to ₹66.1 crore, compared to ₹58.7 crore in the same quarter last year. This profit surge indicates a solid recovery from earlier challenges, as Bata India had previously flagged signs of demand revival during the local festive season after reporting a steep profit decline in the July–September quarter. At that time, consumers had delayed purchases in anticipation of lower tax rates following the GST revision.
Strategic Growth and Market Expansion
In its earnings filing, the company highlighted that its premium product lines, including brands like Hush Puppies and Power, demonstrated robust growth. Additionally, the contribution from Fresh sales continued to improve on a quarter-on-quarter basis, reflecting successful product diversification and marketing strategies.
During the December quarter, Bata India aggressively expanded its retail footprint by adding 27 franchise stores, bringing the total store count to 688. This expansion underscores the company's commitment to enhancing its market presence and accessibility across India.
Stock Performance and Historical Context
Despite the recent strength in Bata India's shares, the stock continues to trade with significant cuts from previous highs. It faced prolonged pressure between November 2021 and January 2026, losing approximately 62% of its value during this period.
The stock concluded CY25 with a dramatic crash of 31.41%, representing its largest annual drop in 16 years. The last comparable decline occurred in 2008, when the stock tumbled 63%, according to data from Trendlyne. This historical context highlights the volatility and challenges the company has navigated in recent years.
Disclaimer: Investors are advised to consult with certified financial experts before making any investment decisions, as market conditions can change rapidly and individual circumstances vary.
