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The stock of Bata India (BIL) has been on the rise in the last couple of years. On Friday, after registering its life-time high at Rs 576, the stock retreated. It closed 2.6 per cent lower at Rs 551.25 over the previous day's close of Rs 565. The stock of Bata India doubled in a year's time and almost four times in the last three years.
Meanwhile, the Bata India management on Friday denied reports about “acquisition of substantial shares of company” by an overseas footwear company. It said in a statement that the company “has been made aware of certain speculative rumours relating to alleged acquisition of substantial number of shares of Bata India, purportedly by another international footwear company.” It further said in a note: “Bata India categorically states that it is not aware of any such purported acquisition of substantial shares of BIL and there does not appear to be any basis for such speculation.”
Advise to shareholders
According to the management, BIL is legally obliged to make statutory declarations in a time-bound manner to stock exchanges in the event it is intimated of any substantial acquisition of its shares by any entity or entities acting in concert, in terms of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. “Bata India has not received any such intimation of any such purported acquisition.” It advised the shareholders of Bata India “to disregard any such rumours and not act on any unsubstantiated or speculative information.”
Wise moves
The company managed a complete write-off of losses by 2007 by utilising part of its securities premium following an approved scheme of reduction. Since then, it has posted steady growth in sales and profits — CAGR of three year sales ending FY11 is eight per cent.
Besides, the company also closed more than 100 non-performing stores from 2008 and had aggressive expansion plans.
In the March quarter, it had ‘other income' of Rs 109.3 crore, from divesting its stake in its real estate joint venture at Batanagar. Thanks to the deal, the company's net profit rose 663 per cent Rs 109.36 crore in the quarter ended March as compared with Rs 14.33 crore in the corresponding quarter ended March 2010. Net sales increased 19.87 per cent at Rs 310.65 crore (Rs 259.15 crore) in the same period last year.
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