Bata India shares fell as much as 5 per cent on Thursday on weak Q2 numbers. The footwear-maker reported 38 per cent year-on-year increase in its net profit, but profitability was driven by exceptional items, analysts said.
Bata India's Q2 profit of Rs 54 crore included one-time gain of Rs 32 crore that accrued from the sale of its trade mark "Sparx". Q2 sales grew by just 5 per cent year-on-year to Rs 575 crore.
Bata India's same store sales growth or SSG (a key performance metrics for retailers) was muted at 2 per cent against expectation of 5 per cent growth.
Weak demand, supply chain problems and likely market share loss to e-commerce players impacted Bata India sales, said Nirmal Bang Securities.
Higher-than-expected rental cost impacted Bata's margins, the brokerage added. Bata India's EBITDA margin or gross margin fell 310 basis points to 8.5 per cent in Q2 against expectation of 14.1 per cent.
Nirmal Bang cut its price target on Bata India to Rs 461 from Rs 580 earlier. Bata India shares closed 4.04 per cent lower at Rs 464.65 apiece compared to 1.05 per cent fall in the broader Nifty.
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