February 9, 2024

The Manager The Manager The Secretary

Corporate Relationship Department Listing Department The Calcutta Stock Exchange
BSE Limited National Stock Exchange of India Limited Limited
1st Floor, New Trading Wing, Exchange Plaza, 5th Floor, 7, Lyons Range,
Rotunda Building, Plot No. C-1, Block G, Kolkata - 700001
P J Towers, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E),
Mumbai - 400001 Mumbai - 400051

BSE Security Code: 500043 NSE Symbol: BATAINDIA CSE Scrip Code: 10000003

Dear Sir/Madam,

Subject: Post Earnings call

This is further to our letters dated January 30, 2024 and February 6, 2024, on the captioned subject.

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(as amended), we are enclosing herewith the transcript of the Post Earnings (Conference) Call held on Tuesday,
February 6, 2024.

The same shall also be made available on our website i.e. www.bata.in

We request you to take the same on record.

Thanking you,

Yours faithfully,
For BATA INDIA LIMITED
NITIN Digitally signed
BAGARIA by NITIN BAGARIA
NITIN BAGARIA
AVP – Company Secretary & Compliance Officer

Encl.: As Above

BATA INDIA LIMITED

CIN: L19201WB1931PLC007261
Registered Office: 27B, Camac Street, 1st Floor, Kolkata-700016, West Bengal II Tel.: (033) 23014400 II Fax: (033) 22895748
E-mail: [email protected] II Website: www.bata.in
 “Bata India Limited
Q3 FY ’24 Earnings Conference Call”
February 06, 2024

MANAGEMENT: MR. GUNJAN SHAH – MANAGING DIRECTOR AND

CHIEF EXECUTIVE OFFICER – BATA INDIA LIMITED
MR. ANIL SOMANI – DIRECTOR FINANCE AND CHIEF
FINANCIAL OFFICER – BATA INDIA LIMITED
MR. NITIN BAGARIA – COMPANY SECRETARY – BATA
INDIA LIMITED

MODERATOR: MR. VARUN SINGH – ICICI SECURITIES

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 Bata India Limited
February 06, 2024

Moderator: Ladies and gentlemen, good day and welcome to Bata India Q3 FY24 Earnings Conference
Call hosted by ICICI Securities. As a reminder, all participants' lines will be in the listen-only
mode and there will be an opportunity for you to ask questions after the presentation
concludes. Should you need assistance during the conference call, please signal an operator by
pressing star then zero on your touch-tone phone. Please note that this conference is being
recorded.

I now hand the conference over to Mr. Varun Singh from ICICI Securities. Thank you and
over to you, sir.

Varun Singh: Yes, thank you, Manuja. Good afternoon, everyone. On behalf of ICICI Securities, it is our
absolute pleasure to host Bata Q3 FY24 earnings conference call.

From the management, today we have with us Mr. Gunjan Shah, MD and CEO, Mr. Anil
Somani, Director of Finance and CFO, and Mr. Nitin Bagaria, Company Secretary. Thank you
and over to you, sir.

Nitin Bagaria: Thanks, Manuja. Thanks, Varun and ICICI Securities. A warm welcome to all of you.

We have Gunjan, our India CEO, and we have Anil, Director of Finance and CFO. We have
shared the presentation with the stock exchanges sometime earlier. We will be taking you
through the presentation on this call. We will navigate the slides as well as the page numbers
to stay connected. On slide number two, we have the disclaimer. I am sure you have gone
through the same.

I will now hand over to Gunjan and thank you once again for joining.

Gunjan Shah: Hi, everyone. Welcome to the quarter three analyst conference call. Thank you for joining us. I
will quickly jump into the presentation. While it has been a relatively muted environment from
a demand perspective, we continued with our strategic levers and the thrust areas and in fact,
even invested in a couple of areas and which I will highlight as we go through the presentation.
On slide number four, we continued on our portfolio evolution.

It continues, the premiumisation journey continues. Premium categories did outgrow our
overall portfolio growth driven by Floatz, [Comfit], basically the Hush Puppies and the Bata
Comfit brand and we also made significant movement towards newness in our stores. We are
looking at this like a big thrust lever going forward and in the coming quarters, we would want
to see a significant democratised newness and portfolio evolution across the store network of
the wide portfolio that we have across categories and we put in measurable metrics in place for
that.

But even the last quarter did see some improvement on that front. We continued our expansion
journey, both COCO as well as Franchise. Obviously, as I have guided in the past also and we
have worked upon it that Franchise will outpace and dominate the expansion journey and that
will stand us in good stead because it is a far more capital as well as cost efficient channel for
us from a margin perspective also.

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February 06, 2024

Even the multi-brand outlets, while the mass market continues to see sluggishness, we did see
the infrastructure build up now with a focus towards retail and we will want to focus on that
going forward while we will wait for that turnaround from a market perspective. From
marketing investments, the big highlight for this quarter, we did invest significantly in this
quarter on our marketing campaign. We did have an optimistic outlook on the way the season
follow through would have been in this quarter while the response has been a little muted from
a consumer sentiment perspective.

But the campaign did deliver significantly on the metrics of fashion, trendiness as well as
modernity. Brand health metrics, the way we measure every quarter have seen on most levels
ever highest measures and therefore deliverables against it. But we will want to see that
translate into much higher throughputs.

The digital footprint work continues aggressively has been and even for the previous quarter
was the fastest growing channel, growing handsomely in strong double digits and backed by
even the Omni channel which is through our entire EBO network delivered at home. That also
continued its progress. We have now made sure that the Omni business of ours which was still
about let's say three quarters back restricted to our COCO outlets is now expanded to our
Franchise outlets.

Now the option and therefore the enablement for it has been expanded to almost 80% of our
Franchise stores. We are seeing traction for it. There is a lot of headroom to match up to the
kind of contribution that Omni gives into our COCO outlets.

So, we will want to keep tracking on the Franchise outlet only. On the supply chain, the point
number five that you see on the left, two large progress updates. One is that we have continued
the outsourcing of non-core areas.

Last year we had outsourced basically the North warehouse. In this quarter we successfully did
the transition of outsourcing of our South warehouse that effectively translates to a third-party
service provider or the South warehouse operation which is almost 300 headcount and with
much better efficiencies as well as effectiveness in terms of service orientation.

The other big one which we had shared with all of you last quarter where we had taken a large
strategic call on shutting down our factory in Southcan in Bangalore which was not adding
value in the long run for us. We have successfully progressed on the VRS compliance or
completion and I think that has gone smoothly.

We did however as we have tried to do in the last recent months or recent quarters kept a tight
control on overhead costs while we continue to invest in marketing as well as future readiness
on technology etcetera. That immediately brings me to the technology which is the seventh
point that is there out here.

The ERP program, there are two large technology projects which are underway. The high-
performance merchandising project has gone live with now pilot modules running successfully
and we expect the full commercialization in the next couple of months. Similarly on the ERP

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February 06, 2024

project with MS Dynamics and I will elaborate on the chart that is on track for
commercialization in the subsequent quarter.

With that I will try and move to some key highlights that elaborate on the points that I
mentioned on the thrust chart. Expansion continues as I mentioned. We have now successfully
crossed in December '23 which is almost a year ahead of the initial start plan that we had of
franchise towards crossing 500.

So, I think some very good work, some strong momentum that we see on that front and COCO
continues to selectively project going forward and we will continue doing a prudent investment
even on the COCO side. Simultaneously this is also backed with renovations which we
continue to do a pace at almost now basically about 30 to 40 stores a quarter and we will want
to make sure that we continue that pace. Average age of our stores has come down to below 7
years.

We would like it to come down to roughly around about 6.5 years which is a stable state and
that will progress with the Red 2.0 concept in the Bata banners largely now in more than half
of our network and ideally over the next two years we would like to see almost 80% of our
network covered in that including the new stores that we open.

On the slide number seven that you see while we have been trying to make sure that the focus
is on the core banners etc. we have -- I have shared with you future ready initiatives that are
trying to open up new growth verticals.

The Floatz doors continue. Now we are at about 10 doors on Floatz. You see one example we
continue to learn on this. We expand the range on Floatz and the momentum on Floatz
continues. It is now developing a sizeable enough base and at accretive margins. Hush Puppies
which has not gone through a renovation of a new concept.

We have piloted a new concept store for the first time last quarter. It is giving us encouraging
response and there will be an aggressive panning out of this entire renovation of the Hush
Puppies store which has not been touched for almost a decade and that will pan out
aggressively in this quarter as well as subsequent to that. We also have tried out to expand the
franchise of Hush Puppies through efficient kiosk model and that the first kiosk model got
opened last quarter also.

Moving to chart number eight, while the mass market has continued to see sluggishness, we
continue to invest in this channel. We believe that we have got the right model in place and
once we are able to make sure that we get the right momentum going from a consumer
perspective, this will give us multifarious benefits. On a CAGR basis, we still feel we have got
a healthy trajectory going and that is backed by investments which are driven towards
distribution and as you can see in town coverage as well as weighted distribution.

KRO count which is a critical initiative going into 2024 which is key retail outlets which is
making sure that we start getting now a control on retail outlets along with basically getting
feet on street going which will be the way to milk this entire thing in terms of extraction of this
infrastructure has seen a peak last quarter and will continue to invest in this.

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February 06, 2024

The KROs continue to grow faster despite the overall muted environment that we saw in this.
Driven by certain focus categories in school, ladies as well as sports, we also obviously
invested in terms of technology and automation in terms of warehouse automation on the
distribution business.

Digital commerce as I said continues to significantly outpace our overall business. We are now
into consistently double-digit contributions on e-commerce. We are present across all major
platforms. We plan to expand across within these platforms in terms of both categories as well
as channels in terms of B2B as well as B2C whether it is Amazon, Flipkart, Mitra, Nykaa
Fashion, AJIO.

We also have basically now expanded the entire order fulfilment through our Bata stores as
well as warehouses and we want to have a diligent mix between the two. The contribution
remains healthy in terms of both Bata.com, B2C as well as the B2B business. We will see the
B2C continue to grow much faster as well as Bata.com going forward also as has been the last
quarter.

In addition to this, which I don't count in the numbers that I have shared, is the Omni delivery
which I have mentioned and the franchise network that we are now looped in. With 400 plus
franchise enabled, the penetration leaves a lot of headroom to be desired and that we will work
towards in the coming quarters.

They were obviously backed by significant campaigns and a large part of even the marketing
campaign was oriented towards digital which then has a direct co-relation to how we convert
even on the online interfaces of ours in terms of digital commerce.

That brings me to Slide 10. We did launch our largest campaign in our history as well as in the
year gone by. We did go with a front-footed approach that this should get multiplied with the
kind of a season spillover that we would have expected into this quarter while the overall
momentum was still leaving much to be desired and we would have expected much more.

But as I mentioned, in terms of imagery, in terms of fashion as well as style, all metrics that we
measure for in terms of campaign deliverables gave us strong [greens] and the overall health
metrics moved up. There were significant shifts that we did in this campaign compared to our
previous campaigns.

One is that it was an influencer-led entire strategy, whether it is macro, global or national
influencers as well as micro-influencers running into hundreds. We are building up capability
and there is a distinct capability that is required in running this entire model of communication
through influencers, etc. and there will be continuous work on it.

We also made sure that the entire campaign tagline which was every walk is a ramp walk was
backed up with the right kind of merchandise, etc. and that showed up in terms of the growth
that we saw in Bata Red Label, which I will talk about. We did invest in marquee properties to
make sure that the saliency of the brand comes through and that showed up in terms of
awareness and considerations being at ever highest levels during the exit December in terms of
consumer surveys.

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February 06, 2024

And last but not the least, obviously made sure that the entire collection as well as the
activation in the stores in terms of the ramp walk as well as the merchandise backed this entire
proposition that we were trying to register with consumers.

Hence, moving to Slide 11, the premium brands did see a significant outperformance in terms
of growth that continues. We have seen that trend post-COVID. Premium brands do continue
to outpace. While we do see the mass market, while it is still a drag on our overall growth,
there are some signs of it showing some moderation.

But premium brands, as I said, continue to outgrow, led by Red Label in the wedding style
area, Hush Puppies in terms of premium comfort, Comfit in terms of mass comfort under Bata
as well as Floatz in terms of casualization and obviously backed by significant range
expansion and freshness that I talked about in the earlier chart. The premiumization journey
will continue and while we will want to make sure that the mass market becomes wherever
applicable more competitive.

Moving on to Slide 12, the other big area besides marketing that we invested in, we have
continued to invest. We continue to do that. The entire landscape that you see on 12 is a
journey of transformation. A lot of the work has happened in the years gone by. Two large
projects that we are doing this year as well as maybe in a couple of more quarters are HPM as
well as the ERP and effectively that should translate to making sure that we have got wherever
we needed to make up as well as get to cutting edge in terms of technology, it translates out,
giving us datafication and database decision-making, agility in terms of empowerment as well
as enhancing even consumer experience from a front-end perspective, whether it is offline or
the online world.

We will see and keep updating you as we progress in terms of now leveraging some of these
investments that we have made. But that was and this quarter was a large investment that we
made in this. In terms of awards, obviously there were various awards especially on the
software side that we made in terms of CSR as well as in terms of diversity. We continue to
invest in people.

We installed our first -- commercialized our first capex in terms of machine, that is the EVA
machine in our plant in the East and that will gradually ramp up and obviously give us
significant backend benefits in terms of agility of product as well as cost efficiencies that we
see. Initial signs are good and we will ramp it up over the next three to six months. And I think
the other big transformation that the footwear industry has gone through is BIS.

We have successfully transitioned without any hiccup whatsoever. The entire sourcing that we
have, which is largely domestic, into basically the BIS compliant era and we are looking
forward to that transition giving us leverage and an edge going forward. The minor quantity
that we do import, we have already made sure that we have got plans of localization on all
those products going forward so that we don't anticipate any kind of a disruption from that
point of view.

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February 06, 2024

Therefore, then moving to Slide 15, all of this finally resulted in lesser than expected, but
positive growth which was at 0.4%, INR904 crores versus INR900 crores last year. This was
backed by making sure that we were tight on leakages which I mentioned even last quarter and
resulted in expansion of gross margin at about 56% blended across all categories as well as
channels versus 54.8%, so a gain of 120 basis points.

However, we didn't flinch back and as I said, there was a front-footed approach we took in
marketing. As you see on Slide 16, we did make significant investments. On a cumulative
basis, we are still relatively, I would say, at the benchmark that we wanted to stay in this
environment on advertisement, but this quarter we did invest in it at about INR35 crores for
this quarter versus '24, a significant jump. The other big investment was in terms of the IT
cost.

There was also a prudent financial framework guideline adherence that we did which was
expensing out the cumulative ERP-related expenditure that we have done. So, in this entire
blip that you see of 127% versus last year, there was expensing out of the cumulative ERP
implementation cost that we have incurred as capex and therefore hit the cost line.

Therefore, then moving to Slide 17, while we did see muted growth and that does have an
operating leverage impact on the rest of the lines, there was tight control on the rest of the cost
lines. So gross profit did expand, as I said, by about 120 basis points. But however, the
investment that we made plus the fact that in December '22, we did have a back-ended benefit
on rental concessions to the extent of about 100 basis points. That had a, last year versus this
year, cumulative impact on PBT of about 250 basis points which we would have invested or
we would have otherwise flown to.

So therefore, then resulted in an EBITDA de-growth of about 10% at about 21.3, a healthy
double digit on that front, however, and a PBT of about 8.6% at minus 29.5% versus last year.
That brings me to the end of this presentation. Thank you for your time and attention. I'm open
to questions. Thank you.

Moderator: Thank you very much. We will now begin the question-and-answer session. The first question
is from the line of Videesha Sheth from Ambit Capital. Please go ahead.

Videesha Sheth: Yes, hi. Thank you for the opportunity. My first question was on the Freshness that you
mentioned on slide four. You said the Freshness is at highest levels of 34%. I wanted to know
how do you define the new products that are coming under this definition of the product
launched 30, 60, 90 days back? How was this number a year back? And what is the aspiration
for this number for the coming two to three odd years? That would be my first question.

Gunjan Shah: Okay. No, that's good. Actually, it's been a journey, Videesha, on this front. Let's give you a
little perspective. We were let's say going back about six quarters. We were in the range of
about mid-20s or so in terms of Freshness. The way we define Freshness is anything that is
new to store and therefore that consumer cohort that the store services in this season.

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February 06, 2024

It's a season-to-season measure and therefore gets reset every season which is Jan to June as
well as July to December. And therefore, a percentage means out of the total offerings that we
have in a store how much of it is fresh.

Now there is further rigor that we apply to this and we will want to make sure that this
becomes a key proposition because that's what we are trying to promise to consumers in terms
of trendy and fashion. And we will want to dovetail this similar measure at a store and
category level but that mid-20s was still about a couple of seasons back at about 30 and has
now moved to 34%. So that's the journey. I hope that answers your question.

Videesha Sheth: Yes, very much so. And what would the aspiration be for this number for the coming 2 to 3
year?

Gunjan Shah: I think we will actually want to now dovetail this even further into category cluster kind of a
freshness. So, the overall 34% I think we will not want to go beyond 40 for a season Freshness
but within that are we making sure that the entire 2,000 EBO network are we replicating this
entire 34% or 40% is going to be the prime driver going forward. So, it will go up but the big
driver will be making sure that it's democratically spread all across. The minimum threshold
that we want to make sure is that it's not only at a certain cluster of stores and a certain
category but all categories and all clusters of stores is where the endeavour would be on this
front.

Videesha Sheth: Got it. Got it. And second question was on HBM. How are you tracking the benefits from the
implementation of this software? So, one is of course the low contribution from discounted
sales but just trying to understand when can the benefits from using this software when are
they likely to peak in terms of better throughput?

Gunjan Shah: So, I cannot share the business case Videesha but we do have a business case. It is a financial
business case and we are beholden and obviously want to make sure that the team is tracked
against it. There are 3 or 4 levers where the benefits are anticipated to come through. First is
obviously better inventory management. So far more linked data and therefore much better
visibility of information while making decisions. Making decisions much faster on inventory
management and therefore placing the orders in the right articles in the right locations is going
to be one big lever.

The second one is much better availability against what we promised to a store therefore
adherence to basically what they require while maintaining better inventory management. The
third piece and that should result into better conversions and therefore sales. The third piece is
in terms of better financial planning and better control from a merchandiser's perspective in
terms of the right mix of articles and the margin blended profile that the person is wanting to
deliver on.

The last one is control on obsolescence and therefore making sure that we are agile in terms of
moving the stocks to the right places where we can push it out before it results into an
inventory hit on us. So, these are the 4 levers that should in terms of timing of impact they will

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pan out but the sense is that within about 12 months we should have them into a steady state
run rate of impact that have been built into the business case.

Videesha Sheth: What is the mix of sub 1000p products for us during the current quarter? I recall that during
4Q FY'23 the mix was somewhere around 30% to 40%. So just wanted to know the mix for the
current quarter? And also, if the [3-week] consumption were to pick up and consumer wallets
were to revise would we look to monetize that trend by refocusing on the mass end of our
portfolio for the retail operations?

Gunjan Shah: Okay, that's a long question but a quick data point now less than 1000 is being basically for the
last quarter wallet about 30%. Cumulative for the year it was at 34% so it is lower but however
the pace of reduction has come down so I am assuming that if things stay right we will want to
see this fire as I said that goes in conjunction with the mass market business channel of us
which is MBOs.

We continue to invest in it. We are hoping that that's where we will get this entire thing repo
back so while we want to focus on premiumization with the right brands as well as the right
offerings we will not want to lose sight and in fact where required we will take aggressive
steps to capture this revival in demand as we see it. An introduction of article is at this point.

Videesha Sheth: Thank you very much for answering my question. I will get back in the queue.

Moderator: Thank you very much. The next question is from the line of Girish Pai from Nirmal Bang
Equities Private Limited. Please go ahead.

Girish Pai: Yes, thanks for the opportunity. Gunjan, in the flat revenue growth picture that we have for the
quarter what is the volume and ASP expansion that you see?

Gunjan Shah: Both is mid-single digits both ways, Girish. So yes, that's how it is. In addition is that we have
as I mentioned now for almost six quarters, we have stopped price increases so it's largely the
premiumization that is driving this mid-single digit kind of a premium or ASP increase and we
are hoping that the stability on pricing, etcetera, will as I commented just in the previous
question will eventually help us turn around the mass market demand perspective from
consumers. But yes, mid-single digit on the pricing and therefore mid-single digit on volume
de-growth.

Girish Pai: Okay. The other expense part has jumped up on a Y-o-Y basis to almost like 410 basis points.
Can you provide a bridge to that? What are the elements, what are the account heads which
have kind of expanded on a Y-o-Y basis?

Gunjan Shah: I will request the CFO to answer on this.

Anil Somani: So as Gunjan talked about it during his presentation, especially investment on technology
investment on marketing, these are the two big ticket items. Rest of the places we have
leveraged versus last quarter and obviously we have certain rental benefits which would have
flown last year on account of rent concessions resulting from COVID-19. All put together if
we do it, rest all as you would have seen gross margins has gone up by 120 basis points.

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So, these are -- obviously out of this, marketing IT we would getting into the normalized phase
starting next quarter and rental obviously one piece where we are able to leverage on other
costs and that would be something which we would not be able to recoup.

Girish Pai: So, on a normalized basis, how much would the other expenses be as percentage of sales?
Would this come off by 200-300 basis points?

Anil Somani: To give you a slightly simplistic answer, Girish, while we don't have giving you forecast but
the point is that on a YTD basis, except for the expensing out that we did of the cumulative
ERP implementation, rest of it on a YTD basis is reasonably reflective of trend lines.

Girish Pai: Okay. My last question is on fixed costs in the manufacturing, I think on the supply chain side.
Are we done with our pruning there or is there more to come?

Gunjan Shah: Okay. So, South Can was the large structural one that we did which is the factory that I
mentioned in Bangalore and that obviously had a business case behind the VRS and that will
flow through, and we are confident signs are good on that front and we will see those benefits.
But that is I would say less than a quarter of the entire fixed cost from a manufacturing
perspective. So, there are other levers, both operational as well as structural, and we will keep
evaluating and working on all of those in terms of making sure that that helps us become --
that helps us allow for investments on the consumer and the marketing front. There is need
left.

Girish Pai: Thank you.

Gunjan Shah: Thank you.

Moderator: Thank you very much. The next question is from the line of Nihal Mahesh Jham from Nuvama
Wealth Management Limited. Please go ahead.

Nihal Mahesh Jham: Yes, thank you so much and good evening. Sir, my first question was on the marketing bit.
You have taken a decent step up and I think we spent around 4% of our top line versus our
historical run rate of around 2%-2.5%. So, the first question was that is this a reset you plan to
continue over the course of the years ahead?

And second is while you did mention about the slowdown, was it that we saw a higher increase
in footfalls or maybe an increase in online clicks, any of those metrics which maybe at least
got more customers aware of our brand and maybe the convergence did not happen maybe
because of slowdown. Just your thoughts on how effective were the marketing spend from that
perspective.

Gunjan Shah: Okay. On the first piece, it is the direction that we want to take on the front that I mentioned in
my chart which is digital influencer-led focus towards style trendiness and bringing in a certain
amount of confidence. That is the direction that we want to take. Obviously, campaign to
campaign the way we want to communicate, the kind of collection that we are bringing. But
the core of it will be on these pivots and we will want to sustain because it takes time for a

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February 06, 2024

large enough consumer base and newer consumers to register the entire message that we want
to give.

It has to be backed up as I said in the question that I answered a few minutes back, which was
on making sure that we have got the right kind of store experience as well as the freshness in
stores, and that I had detailed out a little earlier. So, we will want to sustain and continue with
that, with obviously a flavour campaign by campaign. But the core message and the medium
we would like to sustain.

On the second piece in terms of impact, while yes as I said that we would have desired much
better impact in terms of the business results. But as I mentioned all signs of brand metrics, in
fact while in absolute I don't think we were happy with the kind of footfall impact, but it was
sequentially better versus what we saw in the previous quarter.

And brand health metrics I mentioned right from the entire consumer funnel from awareness to
consideration towards [inaudible] as well as in terms of style and modernity, we hit ever higher
peaks on that. So good signs on that front and therefore, we are encouraged to continue
investing on it on a phasing basis.

Nihal Mahesh Jham: Understood. Just one more question. We do specifically highlight how the growth for Red
Label, Comfit and Floatz has been keeping Hush Puppies out here. What would be the ballpark
contribution of these three brands as of now to our total revenue?

Gunjan Shah: Should be in the range of about 15%

Nihal Mahesh Jham: And Hush Puppies is approximately 20%?

Gunjan Shah: Yes.

Nihal Mahesh Jham: Understood.

Gunjan Shah: That broadly correlates to our price point which is greater than 2,000.

Nihal Mahesh Jham: Yes. Thank you so much. I'm done.

Gunjan Shah: Thank you.

Moderator: Thank you very much. The next question is from the line of Gaurav Jogani from Axis Capital.
Please go ahead.

Gaurav Jogani: Thank you. This is a my question you know again follow up to the previous question that you
know why we see please speak.

Gunjan Shah: Please speak a little louder Gaurav.

Gaurav Jogani: Yes so is this better, can you hear me now?

Gunjan Shah: Yes

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Gaurav Jogani: So, my question is a follow-up to the previous question, where you know, the 15% to 20%
contribution coming from the fast-growing brands. So, would that mean, that the other, the rest
of the 60%-65% odd brands are declining in high single-digits, because of which we are seeing
a flattish kind of growth there? And so, that is one part of the question and the other being,
what possibly you see could lead to a revival that could tell in future lead to a double-digit
growth for the overall portfolio?

Gunjan Shah: Okay, the first question is mathematics Gaurav. So, whatever I say, I'm sure you've got
mathematics to make sure that the average works out. So obviously, yes. But that doesn't mean
that it's all dependent on only, while a large part of it is also correlated to price point and the
segment that is relatively sluggish, I would say, so some turnaround from a consumer
perspective will help.

But as I mentioned, there are a few things that we are working on. One is to make sure that
across price points and categories, we want to make sure that we present on the front foot
freshness. We did invest in marketing. We want to make sure that it's backed up with basically
enough new range coming through and a proposition to consumers. And there will be a lot of
work, and I talked about it in reasonable detail a little while earlier.

The second piece that is there is we continue to invest in accessibility to consumers, whether
it's through the franchise route, in terms of EBOs, whether it is in the e-commerce space, as
well as in the MBO space. And I've talked about it in the presentation.

Last but not the least, in certain pockets where we sense that we have got some flexibility, in a
selective manner we will take aggressive affordability calls to bring about value for money
back to consumers. We have not taken price increases, so we are assuming that consumers are
slowly stabilizing to prices.

But in certain cases, we might want to even selectively take price reversals. I do not think the
weightage will be large, but yes, we will take those actions also where required. So,
combination of these three from our perspective should help us as the momentum turns.

Gaurav Jogani: And sir my second and the last question is with regards to the BIS, you know whatever we can
understand from the BIS implementation is that it is largely to you know help to curb the cheap
quality imports that are coming from China and other countries and you know given
approximately 25% to 30% contribution for us comes from the INR500 and below segment.

So how do you see the benefits from the BIS implementation helping Bata given that you
know again that particular segment is I think declining higher versus the other portfolio?

Gunjan Shah: Yes. There are actually multiple questions in this question that you have asked. Our first
priority was to ensure that we secure our own manufacturing across categories as well as
obviously expanding as well as a very large sourcing base that we have of our suppliers. We
are simultaneously looking at consolidation of suppliers towards larger guys, but either way
the entire universe has been brought under the BIS fold and is compliant and therefore our
priority was to make sure that we don't have any disruption whatsoever in terms of supplies.

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How does it pan out from a perspective of other players getting impacted etc. I have mentioned
this even last quarter when I talked about this, is that relative to what we have seen in the past
to some other industries going through BIS which is toys for example, the industry in footwear
in India is relatively well developed, specifically in certain segments, right, in terms of
construction type as well as price points.

So, there will be certain pockets where I'm assuming that there will be turbulence, provided we
are seeing what is the kind of implementation the government goes through. So, we'll have to
wait and watch on that front, but our priority was to first make sure our house is right and we
are ready for the transition. That we are good on.

Gaurav Jogani: Sir, just a follow up on this. Would it be a right understanding that a bulk of a large part of the
imports does happen in the INR500 and below segment and that in a sense impacts the
competitive ability of the organized players and probably that could be better once BIS is
implemented?

Gunjan Shah: I would say it cuts both ways, Gaurav. We have also analysed the import data etcetera. We do
get access to it. So, it is not only that but yes, it is mirroring the ratio that we have in India. So,
a similar ratio reflects even in terms of imports. There is a lot of high-end imports that also
happen. As even in our case there were a few of them. So, I think we'll have to see how that
reflects all across, but it's evenly, you know, proportionate all across price points.

Gaurav Jogani: Sure sir. Thank you. Thank you. That's all for me.

Moderator: Thank you very much the next question is from the line of Jay Gandhi from HDFC Securities
Please go ahead

Jay Gandhi: Hi, thank you for the opportunity. The first one is could you help me with the channel mix for
the first 9 months in terms of retail distribution and online?

Gunjan Shah: And can you just complete the second question also Jay.

Jay Gandhi: Yes, so in general, just wanted to kind of, you know, understand the gross margin movement a
little better from a nine-month perspective. So, once you have pre-revised over the course of,
you know, the past nine months or past one year, there would be a counterbalancing, you
know, lever also, right? If, basically, if your distribution is growing faster or the online piece is
growing faster or even if the gross, if the franchising piece is growing faster, this will be a
counterbalancing factor to your premiumization story, right? I'm only talking from a gross
margin perspective?

Gunjan Shah: Okay, all right. While we remove the data point for the mix, I think let me answer the second
one. The piece is that you are right. See basically the point is that as I mentioned we have not
taken price increases for almost several quarters now, more than a year. So effectively
whatever we are seeing is ASP increase is just because of the mix.

Now the mix is because of two plays. One is because of product mix primarily and some
amount of channel mix. So, if the multi-brand outlet does not grow as fast, effectively the mass

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market is also relatively not growing as fast and therefore it is reflecting the overall ASP
increase.

So, you are right in a way. The gross margin will not have too much of an impact. Some of it is
coming through because of the premiumization per se. Some of it is coming off because we
have managed to be a little more efficient on leakages, promotions, etcetera and markdowns,
but a combination of that is what is giving you basically the gross-margin impact, but
premiumization is largely coming through mix.

As I mentioned a couple of questions back, is that we are wanting to make sure we get the
mass market going also wherever relevant without compromising on margins and the action
that I talked about at that point in time.

On the ratio of mix etcetera largely I would say that we have got I&D at roughly around, so
basically I&D has been a little lower. Normally we are at a YTD level basically at about 15%
but for the quarter was at about 12%. E-commerce is steady state at 10% consistently and that
continues. Franchise is now in realized turnover because it is basically discounted when you
sell it to a franchise partner, but that now is steady state at about 7%, 7.5% and the rest about
70% is in COCO which is EBOs, Company Owned Company Operated. Does that answer the
question?

Jay Gandhi: Well, yes, it does. See, I understand this. The only thing is that, I was wondering that you've
gone from about 390-odd franchises to about 500-plus. I'm sure all of these channels,
franchises or distribution or e-commerce, they've only grown relative to the COCO part Y-o-Y.

The only thing is, yes, I understand that certain amount of premiumization would have helped
gross margins. But the limited point is that each of these channels, franchises, anything which
is non-COCO is likely to be gross margin dilutive?

Gunjan Shah: Yes, you're right. So, there will be some amount of dilution that will happen. So, let's say, for
example, if 150 basis points, 120 basis points is overall gross margin expansion, then the mix
impact would be a little larger from a product perspective because the channel mix would have
taken away a little. You're right.

Jay Gandhi: Correct. Fair enough. And the other question I had was on the rental, on the base year. So, you
mentioned that you had about 100 bps of savings last year, right? Now, I was looking at the
annual report and based on the annual report, the rentals is about INR420 crores, INR430 odd
crores, which accounts to about 12 and a half odd percent of sales. And this is only in stock.

Even if I look at it from a rent per square foot perspective, based on the area that you report,
from FY '22 to '23, rent as a percentage of sales has actually come, it's about 12 and a half
percent. Even if I look at FY '19, it was about 12.9 percent. So the point is you are already
firing at a similar rent per square foot as what you have been pre-pandemic times.

So is it that when FY '23, this rental bill that you are seeing in FY '23, is that going to be a
meaningful bump? Is this rent per square foot going to continue?

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Gunjan Shah: Okay. So my comment and that Anil then expanded upon was for the quarter, Jai. What you
are talking about is annual figures and we need to check them also. But my comment was for
the quarter, there was a certain amount of rental concession post-COVID that got back-ended,
that got exhausted obviously in this quarter last year and therefore on a year-on-year basis,
there is about 100 basis points impact. That's what we commented, limited to the quarter. For
the full year, I am sure your numbers are correct, but we can separately clarify to you exactly,
how does it reconcile.

Jay Gandhi: No, sir. Point set. Thank you so much for this.

Gunjan Shah: Okay, Jay. Thank you.

Moderator: Thank you very much. The next question is from the line of Ankit Kedia from Phillip Capital.
Please go ahead.

Ankit Kedia: Thank you. So my first question is on the KRO counters, they are less than one per town,
which seems a very odd number. So can you define how do you define this KRO in terms of
revenue per counter and what could be the opportunity size in terms of say two, three per city
or per town? So over the next two years, you would want to leverage these key retail outlets?

Gunjan Shah: Okay, Ankit. So obviously, you know, I mean, the ideal situation is in a very mature and
evolved scenario is the way an FMCG would go about doing this, right? But there are two
parallel tracks that are running, right?

One is access to towns and therefore making sure that Bata is accessible where the consumers
would like to be. And obviously, we don't have, enough and more reach that we've got.
Therefore, the entire town expansion, the pieces that where we've got some kind of a control
and understanding and therefore stability in terms of distribution expansion, therefore towns
that we have gone, pick out the larger outlets on those where we see basically so throughputs
that give us outlets that give us throughputs of more than about 25 to 40,000 per month, right?

How do we make sure that we are able to present, not only make ourselves present, but present
it to consumers in a controlled fashion, make sure that the range comes alive, we've got a
certain critical mass of the kind of offering that we want, whether it's in men's dress in Bata
Rebook, or whether it's let's say in power open, or the EVA range that we are coming out with,
etc. So making sure that we've got a certain critical mass and the presentability coming through
is what the KRO action plan is. It will always follow with a lag, but your expectation is right.

And that's where we would like to desire to move towards. And that's what the curve is trying
to show you. It's a journey that's relatively nascent.

And I would say that, it's got long legs to go. Right now, the contribution of KRO to a
distribution business is in the range of about early double digits. But we are expecting that
even now, despite the overall muted scenario, it does grow much faster. And that should
continue irrespective of how the environment changes.

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Ankit Kedia: And sir, when you say when the demand comes back, you could take a reverse price action,
typically for the MBO market, this 15% revenue contribution from IND over the next three
years, where do you see this contribution go if the town coverage, KRO count, everything falls
in place right for you?

Gunjan Shah: About 20% plus minimum.

Ankit Kedia: Sure. And my last question is on the April, this presentation, we haven't spoken about April.
So how has been the progress on the April front in our stores? Last quarter, you gave us some
good signs on the April growth.

Gunjan Shah: Yes, yes. So, we are still at, so I think I mentioned it last quarter, we have launched it in about
60 stores, we are at the 60 stores, we have got feedback in terms of what's working, what's not
working, even in certain stores, what is the kind of, location within the store that works.
Certain stores where we have actually removed and put into some other stores, we are still in
active 60 stores, we want to make sure that it gives me a same store growth, delta on apparel
alone of 3% plus before we collectively want to expand it beyond that.

We will want to our expectation is that by let's say, mid of next quarter, we should hit that and
then I will be able to tell you about the expansion plan on it. Simultaneously, a whole bunch of
learnings on merchandise itself, the colours that are working, some of the fits that we are
looking at, as well as materials, all of that is obviously underway. But it's going to be
something that we'll want to learn before we expand.

Ankit Kedia: Thank you. Thank you so much.

Gunjan Shah: Thank you.

Moderator: Thank you very much. The next question is from the line of Shirish Pardeshi from Centrum
Broking. Please go ahead.

Shirish Pardeshi: Hi, good evening team. Thanks for the opportunity. Sir, my first question on slide nine, you
have given a number 4.1 million pairs shipped YTD '24. So, can you strip out the quarter
number for the digital part and the overall part for quarter and the nine months?

Gunjan Shah: What I do have handy is a million pairs for the quarter. So, a little less than million pairs, but
yes, just about rounded off to a million pairs for the quarter.

Shirish Pardeshi: And the overall?

Gunjan Shah: We don't share that. Maybe at the end of the annual report, we will. Yes.

Shirish Pardeshi: Okay. Okay. Thanks. On the Nine West, I think you mentioned that it's on the way, but what is
holding on and any point you can say that how fast it will roll out or it will be a marketing
which will be done on the select and then you will expand or any some colour if you can
share?

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Gunjan Shah: Yes. Yes. So, it takes some time to make sure that we operationalize it. Obviously, the deal
was signed last quarter and it is working at a furious pace. We should see it entering stores
during this quarter. We will want to start off with about 50 stores within the Bata banner. We
will learn how it works. It is a price point that's going to be very, very different. It will be
higher than even Hush Puppies in terms of price point and average level.

We want to make sure it gets presented well in terms of brand stories coming through not only
pieces of fashionable footwear, but also the kind of accessories that we are making sure that it
comes along with. As I said, it will start getting into stores with the launch going through in
this quarter and towards the end of this year is when we will be able to collect thoughts. As I
said, subsequent plan is to make sure that we then reinforce it with an exclusive branded outlet,
a banner store of its own. That's the broad plan.

Shirish Pardeshi: Thank you. And my last question on the margin part. If I look back, I think you did mention
the mix change and channel mix, but I just want to pick up your candid thought. What are the
margin drivers at this time and if there is an inflationary pressure? And if you look at medium
term, I'm not saying guidance, but what aspiration sees that whether we go back to 58-59 or we
will still remain in the similar range?

Gunjan Shah: This is gross margin. I believe we are at levels which are pretty healthy and reasonably
comfortable with Shirish. There are margin drivers. There are ways, levels in which we can do
margin drivers. Obviously, premiumization is one big lever, but also in terms of making sure,
as I said, there is about 7% to 8% blended that we do in terms of consumer spends. About half
of it, a little less than half of it goes into above the line, but there is more than 50% that goes
below the line in terms of markdowns and promotions.

How do we do them more scientifically, etcetera? And the entire piece on merchandise
management, which is going to be digitized through HPM, which will also give us levers,
which I responded to a question earlier. So, there are drivers for it. As I said, we don't see
inflation from a cost perspective. Consumer inflation, demand, yes, there might be an impact,
but right now from a cost perspective, we have stayed away and we have managed to make
sure that the costs are relatively stable. And therefore, that is not a big driver in terms of
margin dilution going forward right now.

Shirish Pardeshi: Thank you and all the best.

Varun Singh: Thank you, Shirish.

Moderator: Thank you very much. The next question is from the line of Akshen from Fidelity Investment.
Please go ahead.

Akshen: Okay. So, thank you for the presentation. And, we have been discussing last few quarters on
initiatives that you are doing on portfolio and distribution to get the top line growing. I just
wanted to ask you a question that, with the mix that you are envisaging, both in terms of
products and in terms of distribution, when we look at the business three to five years out,
what is the right margin for a business like that?

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Historically, the margins have been very volatile, but we hit pre-COVID EBITDA margins of
16%, 17%, gone as high as 18%, 19% in quarters. And last year, we were at about, 30%- odd
and then we've seen everything in between. So, as the business, hits the kind of strategic
changes that you're trying to do. Do you go back to 15%, 16%? Those are healthy levels? So,
you think a brand like yours, which is doing as much, should maybe earn a little more?

Gunjan Shah: We are as greedy as you, but we have to, on a lighter note, Akshen, but the point is that our
endeavour is to make sure that very clearly, we want sustainable, profitable growth and both
go hand in hand. So, it's not just a question of percentage EBITDA margins, but also making
sure that we are able to invest enough in terms of driving growth, both current as well as
future. So, we would like to make sure that, we don't give you guidance, Akshen, but we want
to make sure that it's sustainable, profitable growth from all the benchmarks that you have
mentioned.

Akshen: Sure. Let me try to sort of ask this in another way. Your ANP spends for the longest time has
been between 1.5% to 2.5%. As you start doing, more premium portfolio within Bata, is there
like a sense that this needs to maybe go to 4%, 5%? Or do you think spend levels are
appropriate? Basically, what I'm trying to understand is that there's a lot of, optimization of
costs, etcetera, which is going on. Is it necessary to do that to just reinvest in the business or
some of that will flow through EBITDA?

Gunjan Shah: There was latter. So, some of it, I mean, as we implement it successfully, we will want to
invest some of it into our brands as well as the business, as well as, in terms of technology,
etcetera, which we have done and we'll continue to do. But some of it, obviously, will make
sure that we flow into the EBITDA also.

Akshen: Okay. Great. And a last housekeeping question. As far as the last annual report, you had totally
9,400 employees. I think 4,400 were on roles and 5,000 were on contracts. When you're saying
the Southcan VRS is sort of successful, could you help us understand how large the workforce
over there would have been? I mean, is it like 10% of workforce, 20% of workforce? Any just
rough idea would be fine.

Gunjan Shah: No, it's nowhere near the scale of 10% of workforce. A large part of this workforce is in the
stores as well as including in terms of the supply chain. But combined together with the 3PL
outsourcing of warehouses, each warehouse is about 300 manpower. Let's say, for example,
Southcan was about 140 odd people. So, I think cumulatively, it does have its own impact. I
don't have the handy numbers right now, but I'm sure that the team can follow through on that
piece with you separately.

Akshen: Okay. That would be great. Thank you and all the best.

Gunjan Shah: Thank you, Akshen.

Moderator: Thank you very much. The next question is from the line of Ashish Kanodia from Citi Bank.
Please go ahead.

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February 06, 2024

Ashish Kanodia: Thank you for the opportunity, sir. On the volume growth part, I mean, when you say mid-
single-digit decline this quarter, and if you look at this quarter, it basically had the benefit of
delayed festive season. And in the base quarter, which was your Q3 FY'23, there was, again, a
volume decline of around 5%.

And when I looked through the call transcript of two, last quarter you talked about festive
season seeing some growth. And had there been no delay in festive, Q2 should have actually
reported revenue growth, right? So, on that background, what led to this slightly
underwhelming performance on the top line, on the volumes?

Gunjan Shah: Yes. No, I can't agree on that front. In fact, we went in with the same robust philosophy that I
talked to you all last quarter with the festive spillover, etc. And we did back it up with money
where the horse's mouth is on marketing investments, etc. with consumers. The impact was
below par and therefore muted, as you're saying. I think the volume piece is obviously also
traded off with the fact that there is a lower price point that is causing bulk of the sluggishness.

And that has a disproportionate impact on volumes. At an overall level, higher price points,
etcetera, we have seen not only value growths but also volume growths. Because then the
mixed impact gets neutralized at the same price point and it's all driven through basically
growths of volumes.

Ashish Kanodia: Sure, sir. And just the last bit on marketing, I think you touched upon that. While this quarter,
marketing spends are slightly elevated, but on a YTD basis, this spend is mostly normalized.
So, if you can just share what that YTD normalized marketing spends are? And do you expect
this spend to kind of continue over the next two years? From a percentage perspective, is that
the trajectory which you will continue?

Gunjan Shah: So, slightly less than 300 basis points is the pure ATL spend, which is marketing spend. We
would ideally want in a normal scenario, we would like this to inch towards 300 basis points
and slightly higher over a period of time, as we see response and the business impact coming
through on that front.

Ashish Kanodia: Sure, sir. That's very helpful. Thank you.

Gunjan Shah: Thank you, Ashish.

Moderator: Thank you very much. In the interest of time, that was the last question. I would now like to
hand the conference over to management for closing comments.

Nitin Bagaria: So, thank you everyone for joining us. Looking forward to interacting with you again. Thanks.
Thank you, ICICI.

Moderator: On behalf of ICICI Securities, that concludes this conference. Thank you for joining us and
you may now disconnect your lines. Thank you.

Disclaimer: While we have made our best attempt to prepare a verbatim transcript of the proceedings of the Earnings’ Call,
however, this may not be a word-to-word reproduction.

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