Bata India misses Q2 profit view as inflation dampens demand

Shoppers Stop

04/11/2024 14:13

Nov 4 (Reuters) - Footwear maker Bata India  BATA.NS  reported a smaller-than-expected second-quarter profit on
Monday, hurt by dwindling consumer demand amid high inflation. 
    The company said its consolidated profit grew about 53% to 519.79 billion rupees ($6.18 billion) for the quarter
ended Sept. 30, but fell short of analysts' estimate of 587.5 million rupees, per data compiled by LSEG. 
    Bata, which sells brands like Hush Puppies and North Star in India, said its year-ago profit included a 409
million-rupee charge related to a voluntary retirement scheme.
        The company reported a 2.2% rise in its September-quarter revenue to 8.37 billion rupees, lower than the 8.47
billion rupees expected by analysts. 
  

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KEY CONTEXT 
    Apparel and footwear retailers reported lower domestic sales during the second quarter as still-high inflation,
fewer wedding dates and above-average rainfall curbed consumer spending. 
    Peer Metro Brands  METB.NS  and retailer Shoppers Stop  SHOP.NS  also posted subdued quarterly earnings. However,
Metro said it expects demand to recover in the second-half of the financial year, driven by festive and wedding season
spending.
    Relaxo Footwears  RLXO.NS  and Campus Activewear  CAMU.NS  are yet to report their second-quarter results. 
   
    
PEER COMPARISON 
    
                                 Valuation (next 12     Estimates (next 12    Analysts' sentiment              
                                 months)                months)                                                
                      RIC        PE     EV/EBITDA       Revenue     Profit    Mean     No. of   Stock to       Div
                                                        growth      growth    rating*  analyst  price          yield
                                                                                       s        target**       (%)
 Bata India            BATA.NS   46.77  20.35           9.36        22.98     Hold     10       0.94           1.40
 Metro Brands          METB.NS   72.72  37.56           14.75       12.38     Buy      19       0.94           0.37
 Relaxo Footwears      RLXO.NS   65.34  34.59           11.61       23.48     Hold     12       0.95           0.39
 Campus Activewear     CAMU.NS   58.49  30.20           13.96       33.25     Buy      8        0.98           NULL
 * 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
    
JULY-SEPTEMBER STOCK PERFORMANCE    
    

-- All data from LSEG IBES
-- $1 = 84.0860 Indian rupees   

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Bata India Q2 vs peers    https://tmsnrt.rs/3C9BfgB
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 (Reporting by Manvi Pant in Bengaluru; Editing by Abinaya Vijayaraghavan)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))