Customers browse a newly opened Bata store in Ghaziabad. (Photographer: Prashanth Vishwanathan/Bloomberg)

Bata India’s Sales Rise, But Margins Contract Due To Higher Expenses

Bata India Ltd. said its sales rose in the three months ended March as the footwear maker offered discounts and managed to draw younger buyers.

The company’s net sales rose 6.1 percent to Rs 598 crore year-on-year, beating the Bloomberg consensus estimate of Rs 592 crore. Net profit also rose 27 percent to Rs 36 crore over the year-ago quarter.

Launch of contemporary collections for women and the young helped boost sales, an exchange filing quoted Rajeev Gopalakrishnan, president-South Asia, Emerging Markets, Bata, as saying. End-of-season discounts too helped increase footfalls, a company spokesperson told BloombergQuint.

The growth in sales was offset by a 6 percent rise in total expenses, putting its margins under pressure. The company’s operating margins, at 9.2 percent, contracted by 70 basis points compared to the corresponding quarter last year, missing a 10.5 percent consensus estimate of analysts tracked by Bloomberg. The company’s operating profit also fell to Rs 55.1 crore, again missing estimates.

The board recommended a dividend of Rs 3.50 per share, subject to shareholders’ approval.

The company’s stock closed 0.69 percent higher on Monday ahead of the results, outperforming the benchmark S&P BSE Sensex by a small margin.