Bata India shares fell over 6 per cent


New Delhi: On Thursday Bata India shares cut down over 6 per cent following the footwear maker missed Q1 earnings approximations. Bata India's proceeds depreciate 1 per cent to Rs 675 crore, whereas its adjusted net profit drops 6 per cent to Rs 51 crore in the June quarter. Nirmal Bang Securities has also conveyed that, the turn down can be attributed to general market decrease and weak demand in the footwear industry throughout the quarter as rival Relaxo Footwear also accounted a 4.4 per cent decrease in its revenues. 

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Bata India's gross margins (revenue minus cost of goods sold) enhanced 217 basis points to 50.1 per cent due to inferior raw material cost. According to Nirmal Bang Securities operating or EBITDA margin stayed flat at 12.2 per cent, which was 134 basis points under estimates.  The brokerage has also further conveyed that, augment in other expenses impacted Bata's operating margin.  Regardless of weak numbers, Nirmal Bang Securities maintained its "accumulate" rating on Bata India, though the brokerage inferior its target price on the stock to Rs 530 next to Rs 550 previous. 

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The brokerage has also further conveyed that, the policy of Bata India to re-negotiate rent contracts to rationalise rent costs (the impact of which will be entirely visible in the next 12-18 months) should result in healthy working margins going ahead. As of 10.27 a.m., Bata India shares buying and selling 4.21 per cent lower at Rs 529.80 compared to 0.19 per cent gain in the broader Nifty.