Bata India: A Satisfactory Performance in Q3FY14

Bata India posted revenue of Rs 554 crore during Q4FY13 against Rs 509 crore in Q4FY12, up by 8.91 % on yearly basis. Interestingly, the company's overall cost (total expenses) increased just by 6.11 % during the quarter under review on yearly basis. This lower growth in total expenses made Bata India to post a robust growth of 23.84 % in EBITDA on yearly basis. The company posted an EBITDA of Rs 100 crore in Q4FY13 against EBITDA of Rs 81 crore in Q4FY12. However, the company's net profit for Q4FY13 stood at Rs 53 crore against Rs 51 crore during the corresponding period last year. The net profit showed 3.61 % growth on yearly basis due to onetime payment of Rs 10 crore for Voluntary Retirement Scheme during Q4FY13. Excluding this exceptional item, its net profit showed 23.41 % growth on yearly basis.

The lower rise in total expenses helped Bata India to expand its EBITDA margins by 217 basis points to 17.98 % in Q4FY13 against 15.81 % in Q4FY12. Interestingly, the company's net profit margin squeezed by 49 basis points to 9.51 % in Q4FY13 on yearly basis. Excluding the exceptional item, the net margin expanded by 133 basis points during Q4FY13.

In the full financial year of 2013, Bata India reported a growth of 12.09 % in its revenue to Rs 2065 crore in FY13 against last year. Similarly, the net profit during FY13 increased by 10.94 % on yearly basis. If we ignore the exceptional item, the net profit showed a growth of 16.79 % during FY13 as against last year. On margins front, the EBITDA margins showed an expansion of 66 basis points to 15.59 % during FY13. However, the net margins showed a contraction of 10 basis points to 9.24 % during FY13. Again, neglecting the onetime payment for Voluntary Retirement Scheme, the net margin was 9.73 % with an expansion of 39 basis points over last year's net margins.

Bata India showed a satisfactory performance during the financial year 2013 and continues to show good performance in current financial year also. The expansion plan for the company is well in place and the company will be planning to open 100 new stores this year. We are confident about the good performance in future and hence we recommend our reader to hold their positions in the stock for further appreciation.