Bata India Q2 Profit Slumps 73% Amid GST 2.0 Transition, Higher Costs - BW Businessworld

Footwear major Bata India reported a 73.26 per cent year-on-year decline in consolidated net profit to Rs 13.9 crore for the quarter ended 30 September 2025, as lower revenue and higher expenses weighed on performance during the transition to the new GST 2.0 regime. The company had posted a profit of Rs 51.98 crore in the same period last year.

According to a regulatory filing, revenue from operations fell 4.3 per cent to Rs 801.33 crore in the July–September quarter, compared with Rs 837.14 crore a year earlier. The decline was attributed to deferred purchases by channel partners and customers following GST rate rationalisation, as well as a temporary disruption at one of its largest warehouses in July.

EBITDA stood at Rs 166.4 crore, down from Rs 191.8 crore in the year-ago period, as gross margins came under pressure due to higher markdowns for pre-festive inventory clearance and increased marketing expenditure. The company also incurred a one-time exceptional expense of Rs 8.3 crore related to a voluntary retirement scheme at one of its factories, part of its long-term efficiency drive.

Bata said demand showed signs of recovery towards the end of the quarter, supported by early festive buying. Premium brands such as Hush Puppies and Power delivered strong growth, while styles like Ballerina and Easy Slide boosted category expansion, reflecting consumers’ increasing preference for comfortable yet fashionable footwear.

Managing Director and CEO Gunjan Shah noted that the company passed on GST benefits to customers ahead of official announcements to help revive demand. Bata added 30 new franchise stores during the quarter, expanding its footprint in smaller towns and semi-urban markets.

With nearly 2,000 stores nationwide and a refreshed product portfolio, Bata said it remains cautiously optimistic about a demand recovery in the second half of FY26, driven by festive momentum and ongoing cost-efficiency measures.