Shares of Bata India, a well-known shoemaker company, began Friday's trading session positively after the firm delivered healthy performance for the March quarter, led by low raw material (RM) costs and higher demand.
The footwear major on Thursday reported a 4.22% rise in its consolidated net profit to ₹65.62 crore as compared to ₹62.96 crore. Its gross margin improved 80 basis points (bps) YoY to 58.4% due to a moderation in RM prices and the release of old inventory, according to analysts.
It posted a 17% surge in revenues to ₹778.58 crore in Q4 from ₹665.24 crore in the similar quarter of the previous fiscal. The operating profit stood at ₹182 crore, a growth of 15.1% over Q4 FY22.
For the fiscal year ending March 2023, Bata India's net profit increased 213% to ₹323 crore. It reported a net profit of Rs. 103 crore in FY22. Its consolidated revenue from operations came in at ₹3,452 crore in FY23, 44.5% higher than FY22 revenue of ₹2,388 crore.
In response to the development, the stock opened 1.80% higher at ₹1,553 apiece compared to the previous closing price of ₹1,525.55 and surged further during the early trade to ₹1,596.40, up by 4.64%.
The stock has gained 8.68% in a month. However, it is still down by nearly 23% from its 52-week high of ₹2,004. Earlier in February, brokerage firm Sharekhan reaffirmed its 'buy' rating on the stock with a target price of ₹1,775 apiece, citing long-term growth prospects and limited downside risk.
During the last few quarters, the company has witnessed consistent demand for casual and comfortable footwear. This is due to the increasing trend for the purchase of non-occasion wear and the demand for comfort and style, the company said in an exchange filing.
The company said it is refreshing the product portfolio through casualization and the inclusion of premium fashionable products that have reported growth in brands like Hush Puppies, Comfit, Floatz, Red Label, and North Star.
"We are optimistic about our growth in the backdrop of our innovation and evolution of product offerings. We will step up our marketing investments in the coming year to fuel accelerate growth momentum backed by strong investments in technology across the value chain," said Bata Chief Executive Officer and Managing Director Gunjan Shah in a statement.
16 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.