(Reuters) – Footwear maker Bata India 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.
For further highlights, (click here).
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 and retailer Shoppers Stop 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 and Campus Activewear 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 46.77 20.35 9.36 22.98 Hold 10 0.94 1.40
Metro Brands 72.72 37.56 14.75 12.38 Buy 19 0.94 0.37
Relaxo Footwears 65.34 34.59 11.61 23.48 Hold 12 0.95 0.39
Campus Activewear 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
(Reporting by Manvi Pant in Bengaluru; Editing by Abinaya Vijayaraghavan)
