Bata India in losses as demand falls for premium products. Bata India is now in recurring losses. Which flourished before the pandemic following rapid growth in its premium segment. However, has now facing tough time. Some of the shift toward high-end products could be struck by discretionary spending slowing down.
In a post-lock down update, the firm recently announced it has opened about 1,200 of its 1,400 stores. The firm also said its manufacturing plant at Batanagar has reopened.
Volume growth in the next few months may hit the brakes. Schools & Colleges have not yet re-opened, while offices are partially open with 1/3rd attendance. Social and other gatherings have also been restricted. As a result, sales growth may shrink.
“We expect revenues to decline by 30% in FY21 owing to impact of COVID-19 on inventories build-up in the channel, weak demand for premium products, and closure of retail stores in metros. However, with the onset of the festival season from Q2 FY21, we believe the second half of FY21 would see some respite from the Covid’19-struck demand with progressive normalization seen in FY22,” said analysts at Axis Securities Ltd.
Our factory workers make it possible for us to serve you better than ever, even now. It’s our duty to keep them safe. With their cooperation, social distancing is being successfully maintained at all our factories. #CovidSafety #SocialDistancing #WeAreSafe pic.twitter.com/FDi52f5NfD
— BATA India (@BATA_India) July 7, 2020
