Bata India shares rallied nearly 4% in Thursday's trade as the footwear major said its eyeing consistent and profitable double-digit growth going ahead. "Our desire is to ensure that we get consistent and profitable double-digit growth, and that is what the firm is investing towards," said chief executive officer Gunjan Shah while speaking to CNBC-TV18.
"There are many levers that we are trying to work upon while the macros will iron themselves out over a period of time,” Shah said a day after the company reported a 38% fall in second-quarter profit, hurt by a one-time charge and as inflationary pressures kept footfalls at its shoe outlets in check.
The Bata India CEO plans to add about 40-50 stores every quarter. He said the company will be ahead of its FY25 target of 500 stores by one year.
“Store expansion is one big piece. While we are doing it very prudently and in couple of years we will go with the same strategy, which is we should be adding about 40-50 stores every quarter. Even last quarter was about 30 stores, slightly lower, but we should be averaging about 40-50 and it will be 80:20 ratio," he said.
Further, Shah said, "Capital efficient model of the franchise model keeps gaining traction, we will be ahead of what my medium-term target was of by FY25 hitting 500 stores. We should be closing it one year in advance. So about 80% on franchise as well as about 20% on the company own model. So, we will expand both, but in a prudent manner."
Bata India posted a consolidated profit fell of ₹34 crore in the July-September quarter, compared to ₹55 crore in the year-ago quarter. The second quarter's results included a ₹41 crore charge related to a voluntary retirement scheme at one of its manufacturing units.
The footwear maker's revenue stood at ₹819 crore, down 1.3% from ₹829.7 crore in the year-ago quarter, the company said in a filing.
Indian businesses grappled with lower footfall in the quarter as higher inflation pushed consumers to tighten their belts, particularly on non-essential spending.
Shares in Bata, a unit of its Netherlands-based namesake parent, were trading 0.70% higher at ₹1,567.90 apiece at around 12:34 pm. The Bata India stock has given a return of 4.51% in the last six months. The benchmark Nifty50 index has given a return of 6.45% during the same period.
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