X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Bata India: Labour ‘pangs’ - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Sep 22, 2000

    Bata India: Labour ‘pangs’

    Bata India, one of India’s largest shoemakers is in trouble again. The company’s fortunes seem to be up one year and down the very next. After almost being wiped out, Bata turned the corner in FY97 thanks to a new management, aggressive product launches and a shift towards its traditional mass market offering high value affordable products. At present, it derives over 70% of its revenues from retail outlets while the balance comes from the wholesale segment.

    The company had earlier tried to enter the high end market with brands like Hush Puppies, but could not make a mark. Its also used its retail network to market high end apparel products such as ties, T-shirts, Jackets etc. with little success.

    (Rs m) 1HFY00 1HFY01 Change
    Sales 4,061 3,900 -4.0%
    Other Income 5 4 -13.3%
    Expenditure 3,690 3,632 -1.6%
    Operating Profit (EBDIT) 371 268 -27.8%
    Operating Profit Margin (%) 9.1% 6.9%  
    Interest 35 41 16.6%
    Depreciation 64 67 5.2%
    Profit before Tax 277 164 -40.7%
    Tax 104 63 -39.4%
    Profit after Tax/(Loss) 174 102 -41.5%
    Net profit margin (%) 4.3% 2.6%  
    Earnings per share* 6.74 3.96  
    * (annualised)      
    The current year has given Bata nothing to cheer about. During the first of the current financial year (1HFY01) the company’s turnover recorded a marginal decline of 4%, but higher interest and depreciation provisions pruned the company’s bottomline by 42%.

    As if these problems were not enough, its traditional problems with the workforce erupted again, this time in its Calcutta unit. While Bata is struggling to cope with its high debt burden and nagging employee disruptions, international entrants like Reebok, Nike and Tuffs along with Indian brands like Action are eating into Bata’s market with aggressive new launches and sleek positioning at retail outlets.

    The stock currently trades at a P/e multiple of 13 times its estimated FY2001 earnings. Historically, the stock has traded at a P/e ratio of 45 to 50 times.

    Bata is trying hard to prune its workforce through a VRS. It is also retiring high cost debts to improve the profitability of the company. But until it settles issues with its workforce it may find it hard to sustain its growth.

     

     

    Equitymaster requests your view! Post a comment on "Bata India: Labour ‘pangs’". Click here!

      
     

    More Views on News

    Marico: Earnings Hit by Lower Volumes and Firming Input Prices (Quarterly Results Update - Detailed)

    Aug 9, 2017

    While GST implementation brought down volumes and profitability in the short run, Marico remains optimistic in the long run.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    BATA INDIA SHARE PRICE


    Aug 22, 2017 11:20 AM

    TRACK BATA INDIA

    • Track your investment in BATA INDIA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    BATA INDIA - HYPERMARCAS COMPARISON

    Compare Company With Charts

    COMPARE BATA INDIA WITH

    MARKET STATS