Citi has maintained its sell rating on Bata India while cutting its target price to ₹750 per share after the footwear major reported a disappointing Q2FY26 performance. Revenue declined 4% year-on-year, coming in 9% below Citi’s estimates, despite a weak base, early festive season, and several ongoing growth initiatives including store expansion, new category launches, and focus on premiumisation.
Profitability was significantly below expectations, with EBITDA down 17% year-on-year (30% below Citi’s estimate) and adjusted PAT falling 61% (67% below Citi’s projection). Management attributed the weak performance to deferment of purchases by trade partners and consumers following the announcement of GST rate rationalisation, coupled with operational disruption at one of its largest warehouses in July 2025.
Citi said profitability was also impacted by higher markdowns to clear inventory ahead of the festive season and increased marketing investments to support brand visibility. The brokerage believes these near-term headwinds, coupled with limited volume recovery, will continue to weigh on margins in the coming quarters.
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