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Bata India shares may fall up to 20% as analysts cite weak sales momentumManagement plans to scale up its Zero Base Merchandising (ZBM) initiative to 300 stores by Q1FY26, which would cover 45–50% of the company’s retail turnover. The ZBM project aims to increase product availability, reduce service time, and lower per-store inventory levels.By Meghna Sen   June 3, 2025, 9:27:41 AM IST (Published)2 Min ReadShares of Bata India Ltd. opened lower on Tuesday, June 3, after the company reported continued weak performance in the fourth quarter of the last fiscal year, with revenue contracting 1.2% year-on-year.

Global brokerage firm Goldman Sachs maintained a 'Sell' rating on Bata India, with a price target of ₹1,100 per share.

Q4 profit missed expectations, largely due to weak gross margins. Goldman Sachs attributed this margin pressure to an unfavorable product mix and discounting strategies, despite mid-single-digit volume growth led by franchise and online channels.

The brokerage mentioned that store format initiatives are not yet contributing meaningfully. While operating expenses were well-managed, Goldman emphasised that an improvement in retail same-store sales growth (SSSG) is required for any potential re-rating.

Goldman Sachs also flagged further downside potential, saying that Bata's sales growth underperformance may widen compared to its apparel and footwear peers.

Similarly, Nuvama Institutional Equities has reiterated its 'Reduce' rating on Bata India, revising its price target lower to ₹1,011 from ₹1,180 earlier.

"Although the company has rolled out multiple back-end initiatives, they have yet to reflect in financial performance," Nuvama said. "With cost optimisations largely in place, the key challenge remains driving growth."

Management plans to scale up its Zero Base Merchandising (ZBM) initiative to 300 stores by Q1FY26, which would cover 45–50% of the company’s retail turnover. The ZBM project aims to increase product availability, reduce service time, and lower per-store inventory levels.

In terms of expansion, Bata added 19 franchise stores in the quarter and 91 during FY25, taking the total franchise count to 624.

Overall, the company’s store network increased by 9 in Q4 and 100 in FY25, bringing the total store count to 1,962. For FY26, the company has guided for more aggressive expansion, with an 80:20 split between franchise and company-owned-company-operated (COCO) stores.

With situation on ground remaining similar to earlier quarters, the brokerage has further cut its revenue estimates for FY26 and FY27 by 2.5% and 5.3%, respectively, and lowered profit estimates by 3.7% and 14.3%.

Shares of Bata India Ltd. ended little changed on Monday at ₹1,260.10. The stock has declined 10% so far in 2025.Continue ReadingNote To ReadersDisclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsBata Indiashare market today