The Hindu Business Line : Bata turnaround is sustainable: Chairman

Prospects bright: Mr P.M. Sinha (right), Chairman, and Mr M. Villagran, Managing Director of Bata India Ltd, at the 75th annual general meeting of the company in Kolkata on Thursday. – A. Roy Chowdhury

Our Bureau

Kolkata, June 19 Buoyed by a “sustainable turnaround” which enabled the company to declare a dividend after a period of five years, Bata India Ltd has decided to open 250 new outlets across the country within the next three years.

In addition, 60-80 existing outlets would be upgraded, Mr P.M. Sinha, Chairman of Bata India Ltd, told shareholders at the company’s 75th annual general meeting here today.

Mr Sinha said the company’s turnaround was “sustainable” and it was looking to the future “with great hope”. The focus would be on using the cash that is generated to open more outlets and expand the business.

“We need the cash to expand and grow the business. A higher dividend or issue of bonus shares is not possible unless we grow the business,” he told shareholders who demanded a higher dividend or a bonus issue on the occasion of the company’s Platinum Jubilee year.

Mr Sinha told shareholders that restructuring and re-engineering initiatives adopted by the company had yielded the desired results and “we are now on a sustainable growth and profit path”.

Domestic focus

The focus now was on introducing new designs and quality products in the Indian market. With the export market being extremely competitive, a conscious decision had been taken to concentrate on the domestic market.

He informed shareholders that the land development project at Batanagar was progressing and was expected to be completed by 2012-13. Of the 262 acres that was being developed, 25 acres was being set aside for the development of an IT SEZ.

Since Bata India has a 50 per cent stake in the special purpose vehicle that has been created to set up the Batanagar project, 50 per cent of the cash flow from it would come to the company as dividend. Negotiations with hotels, hospitals, schools, etc, were underway, he said.

During the year ended December 31, 2007, Bata India Ltd recorded a net turnover of Rs 867.48 crore against Rs 770.20 crore in 2006. The profit before tax in the calendar year 2007 stood at Rs 55.15 crore compared with Rs 49.18 crore in 2006. The profit after tax in 2007 was Rs 47.44 crore against Rs 40.15 crore in 2006.

A total dividend of 20 per cent (Rs 2 on equity shares of the face value of Rs 10 each and including five per cent to celebrate the company’s Platinum Jubilee year) was declared for the year gone by.

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