Bata India's Stock Soars More Than 5% Amid Reports of Potential Collaboration with Adidas

17 Aug, 2023

Bata India's Stock Soars More Than 5% Amid Reports of Potential Collaboration with Adidas

Bata India's shares experienced a significant surge of 5.46 percent, reaching Rs 1,737.05 at 12.49 pm on August 17. This uptick followed reports that the renowned shoe and leather goods manufacturer had initiated discussions with Adidas to establish a collaborative presence within the Indian market.

Comparatively, the current stock price remains notably lower than its 52-week peak of Rs 1,989, which was achieved precisely a year earlier on August 17, 2022. The trading activity on the stock exchange saw a noteworthy turnover of around 15 lakh shares, a volume five times higher than the company's usual monthly average.

Sources reported that both Bata India and Adidas, prominent names in the footwear industry, are actively engaged in talks to form a strategic alliance. These discussions appear to have reached an advanced stage, as indicated by reports from CNBC-TV18, which relied on undisclosed sources.

Bata India's business strategy has taken a new direction by incorporating premium brands into its portfolio. Traditionally recognized for its affordable product range, the brand has shifted its focus to cater to a wider audience with a preference for more upscale offerings. This evolution signifies Bata's intent to attract not only budget-conscious consumers but also those with discerning tastes for high-end selections. An anticipated collaboration with Adidas will further empower Bata India to introduce an array of premium products.

During the Q1FY24 earnings conference call, the management highlighted the growth of market share for Bata India's premium brands such as Hush Puppies, Comfit, and Floatz. This upward trajectory demonstrates a heightened market penetration for Bata India's premium product lines.

In the first quarter of the fiscal year, Bata India achieved a marginal year-on-year (YoY) increase of 1.5 percent in consolidated revenue, totaling Rs 958 crore. However, there was a 10 percent YoY decline in net profit, which stood at Rs 107 crore for the same period.