Bata Pakistan: Marching on trumpet feet

Abu Ahmed | September 01, 2025 at 10:31 AM GMT+05:00

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September 01, 2025 (MLN): Bata, a company that was established primarily to meet humans’ most basic needs, footwear evolved into a lifestyle company over the years.

For Bata, shoes are no longer just about protection from injury, harsh weather, and rough surfaces; they embody the social, psychological, and even aspirational values of customers, as stated in its Mission Statement, which resonates less like a conventional corporate communiqué and more like a customer’s personal aspirations.

Mission Statement: At Bata, we craft more than just shoes; we create opportunities for people to chart their own path. Through innovation, comfort, and timeless design, we enable movement, progress, and self-expression, ensuring that every step our customers take brings them closer to their goals.

Therefore, shouldn’t Bata’s share be the ‘investment by choice’ for investors, just as it is a ‘by choice’ brand for households across Pakistan?

Bata’s evolutionary journey and its consistently strong operating performance could be an insight for investors.

As Bata Pakistan has demonstrated its ability to deliver sustainable earnings year after year except in 2020, a year severely impacted by Covid-when Bata reported a loss of Rs. 82.98 per share.

Earnings Per Share (EPS)

Period	EPS (Rs.)
3M 2025	32.80
2024	112.53
2023	121.20
2022	115.65
2021	72.23
2020	(82.98)
2019	144.03
2018	198.60

Bata’s delivers sustainable earnings by keeping Cost of Sale within its historical average, 52% of Revenue.

Financial Overview

Period	Cost of Sale (% of Revenue)	Revenue Growth/(Decline)	EPS (Rs.)
1st Q 2025	48%	(3%)	32.80
2024	51%	(5%)	112.53
2023	53%	9%	121.20
2022	52%	27%	115.65
2021	54%	19%	72.23
2020	63%	(33%)	(82.98)
2019	55%	4%	144.03
2018	55%	----	198.60

Bata heavy reliance on cost at the expense of growth in top-line carries inherent risks in a low-growth environment.

This risk materialized in the second quarter of 2025, when Bata’s revenue declined by 29% compared to the first quarter of 2025, while the cost of sales and operating expenses rose by 15% and 3%, respectively.

They together drove the profit of Rs.32.80/share in the 1st quarter 2025 to a loss of Rs. 47.81/share in Q2 2025.

Q1 vs Q2 2025 Financial Snapshot

Metric	Q2 2025	Q1 2025	Δ (Change)
Cost of Sale (% of Revenue)	63%	48%	+15%
Revenue Growth/(Decline)	(29%)	(3%)	—
EPS / LPS (Rs.)	(47.80)	32.80	↓ Significant

This raises concerns about Bata’s ability to continue ‘marching on trumpet feet,’ especially in light of the significant decline in ‘Other Income,’ which in the past had helped offset the impact of falling gross profits.

Financial Metrics (Rs in million)

Period	Other Income	Short-term Investments
2Q 2025	25.74	45.01
1Q 2025	16.73	45.06
2024	363.21	45.06
2023	527.85	945.01
2022	259.76	545.06
2021	231.47	1,100.00

Though Other income to remain insignificant in future following the liquidation of short-term investments, yet, reassurance about Bata’s financial viability in future may be drawn from the following facts:

a- Bata remained profitable in 2024 and 1st quarter of 2025 despite meagre investment income.

b- Investment income has never been a major contributor to other income.

Other Income Breakdown (Rs in million)

Category	2024	2023	2022	2021
Other Income (Total)	363.21	527.85	259.76	310.08
Short-term Investment Income	71.38	(185.14)	50.61	64.71
Exchange Gains/(Loss) - Net	47.80	(58.47)	(62.51)	(84.77)
Lease Modification Gain/(Loss)	—	—	82.99	186.90

c- Bata is naturally aligned with the Population Pyramid of Pakistan

According to the census of 2023, 65% of the population is comprises of school/college-going individuals and the working class.

With a strong youth base—school/college-going and working-class individuals, together accounting for nearly 65% of the population, Bata Pakistan is naturally aligned to be the major beneficiary of the demographic dividend.

It has well-positioned itself to capitalize on the demographic dividend through its strong brand positioning, diversified product portfolio, competitive pricing, extensive distribution network, multichannel marketing, and digitally integrating business processes.

Bata leads the industry by holding 22–25% market share of the formal footwear segment and around 10–12% of the overall market.

Population & Production Overview (Census 2023)

Category	Age Range	% of Population / Value
Schools & College	5–16	29.50%
Working Age Population	15–64	—
Employed	—	27.40%
Unemployed	—	7.80%
Installed Capacity	—	18.36 million pairs
Actual Production	—	8.67 million pairs

Moreover, Bata Pakistan has operating leverage too in its favour. It can cater growing demand for footwear without incurring additional cost owing to the underutilization of its installed capacity.

According to the 2024 Annual Report, the company was utilizing only 47% of its installed capacity.

Therefore, a company where growth, trust, and long-term value have always moved in unison, needs only a strategic transition in its business philosophy from “Cost Efficiency to ‘growth in tandem with cost-efficiency’ will make Bata Pakistan a true embodiment of the maxim:

‘A business strategy that follows the rhythm of the march, where growth follows the rhythm of trust’

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