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Nirmal Bang Report
The better-than-expected Q2 FY22 results by Bata India Ltd. points to pre-Covid-19 type performance by H2 FY22.
Q2 FY22 sales, Ebitda (post Indian-AS 116) and profit after tax outperformed our estimates. Sales and Ebitda were up by 67% and 557% YoY, respectively on a low base.
The key differences between our estimates and the actuals seem to be the 21% beat on revenue and significant control in employee expenses. Gross margin at ~53% was in line with estimate.
Bata India's Q2 FY22 revenue though higher YoY is still 15% lower than Q2 FY20 level, possibly because of weaker demand for premium office and casual wear.
While no more color is available on internals of Q2 FY22, we believe that revenue was driven by digital, franchising and wholesale in terms of growth rates (YoY).
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