The world at your feet 1

Walking with India since 1931

Est 1931 1558 Exclusive Stores Revenue of INR 17,084M

India’s largest footwear brand 49.39M footwears sold in 2019-20 Decline of 44% in 2021 due to the pandemic

Bata is the leading brand in retail and manufacturing of

footwears in India.
● It provides wide portfolio of footwears for whole family - men
(Hush puppies), women (Scholl), youth (NorthStar) and kids
(Bubblegummers).
● 9762 employees across different functions and locations.
● The revenue decreased by 44%. From INR 30B in 2020 to INR
17B in 2021. Most admired Fashion Brand of
The Year (Footwear)’ 2019
Awarded by Images Fashion
Awards 2
Bata in the Footwear Industry
Industry Competitors

Nike, Reebok, New Balance, Converse, Puma, Fila, Adidas, Liberty Shoes,
Apparel - Footwear
Under Armour, Metro Shoes, Woodland, Red Tape.

Footwear Segment in India.

● There is an intense competition in the
footwear market in India. It is projected to
reach to INR 790.6 billion by 2023.
● India is the second largest footwear
manufacturer in the world. 13% of global
footwear production of 22 billion pair is
accounted to India.

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Income Statement
Parameters FY’21 (in crores) FY’20 (in crores) Remarks
Total Revenue Total Revenue decreased by nearly 42% owing to pandemic.
1,802.57 3,124.79

Total Total Expenses went down by almost 27% compared to the previous
Expenses 1,914.59 2,637.56 FY.

EBITDA reduced drastically (71%) when compared to FY’20.

EBITDA 255.19 898.58

EBIT reduced by approximately 101% w.r.t the previous year.

EBIT -9.54 602.82

EBT -113.08 485.08 EBT reduced by nearly 123% compared to FY’20.

The company faced a loss of nearly 86 crores in contrast to the 337
Profit and Loss crore profit in the previous FY.
-85.67 326.92
for the Year

PAT has been decreased in comparison to gross profit as result of

REPORTED extraordinary items such as the pandemic this year.
-90.28 326.92
PAT

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Balance Sheet |P&L Sheet
FY’20 (in FY’20 (in
Parameters FY’21 (in crores) Parameters FY’21 (in crores)
crores) crores)
Share Capital 64 64 Sales 1708 3056

Reserves 1696 1832 Expenses 1546 2210

Borrowings 1032 1249 Total operating Profit 162 846

Other Liabilities 542 589 OPM % 9 28

Total Liabilities 3334 3735 Other Income 89 66

Fixed Assets 1118 1368 Interest 104 129

34 20 Depreciation 265 296

CWIP
5 5 Profit before Tax -117 487
Investments

Other Assets 2178 2343 Tax % 23 32

Total Assets 3334 3735 Net Profit -89 329

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Cash Flow Statement Analysis
Parameters FY’21 (in crores) FY’20 (in ➢ Shareholder’s equity is constant from 10 Years.
crores)
Cash from operating 458 ➢ Investors are not revoking their money showing trust
activity 580
towards the company.
Cash from investing -50 -187
activity ➢ Liquidity ratio is decreased to 2.49 in 2021 as compared
to 2.91 in FY 2020 implying the increase in current
Cash from financing
activity -369 -436 liability.

Net Cash flow 39 -44

➢ CWIP increased from 20 in FY 19-20 to 34 in FY

20-21 which implies they are working to create
more asset which give them profit in the later stage.

➢ Revenue to Expense ratio in FY 21 is 0.94

compared to 1.1 in FY 20.

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Income Statement Analysis
Ratios (FY’21) Percentage (%)
Gross Profit % -4.7
EBITDA % 14.1
EBIT % -0.53
EBT % -6.3

➢ The Total Revenue for Bata India decreased by a whopping
42% as a result of the Covid-19 pandemic.
➢ The luxury branded footwear brands captured 30% of the
market size which led to a decrease in the sales and profit of
the middle market brands such as Bata.
➢ The pandemic hit the target audience of Bata more than those
of the luxury brands which led to a lesser market share.
Scope for improvement in the near future:
➢ Provide discounts to clear inventory
➢ Explore other product segment such as face masks,
gloves, etc.
➢ Promote the in-house e-commerce website (other luxury
footwear brands have generated a substantial sales margin
through the same)
➢ Increased focus on marketing strategy instead of just
enhancing its brick and mortar approach.

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Ratio Analysis and their Interpretations
RATIOS FY 20 FY 21 REMARKS ANALYSIS

Operating Profit Margin 27.17 9.43 Higher the better Sales decreased when compared to previous FY. Resulting in low
Ratio operating profit.

Return On Net Worth 17.23 -5.13 Higher the better Return on net worth has decreased owing to decrease in net sales

Quick Ratio 0.74 0.91 Higher the better AS the Liquidity/Solvency Ratio is increased, it seems to be the company
is generating enough current assets to take care of current liabilities
Current Ratio 1.27 1.38 Higher the better

Fixed Assets Turnover Ratio 1.68 0.93 Higher the better Huge decline in sales resulted for the decrement

Assets Turnover 51.2 81.75 Higher the better Asset turnover saw a rise. Company is utilizing its assets in a better way
to generate sales

Inventory Turnover 3.49 2.81 Higher the better Lessened Ratio indicates that the company is not able to sell its goods
quickly

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Ratio Analysis and their Interpretations

FY 20 FY 21 REMARKS ANALYSIS

Gross profit(in Cr) 485.08 -113.08 Higher the better The Profit terms are
decreased in
PBDIT 29.42 14.94 Higher the better comparison to previous
year due to stagnation
PBIT 19.74 -0.55 Higher the better in Sales and Market
because of Covid-19
PBT 15.88 -6.89 Higher the better

Net Profit(in Cr) 10.7 -5.28 Higher the better

Total Tax Expenses(in Cr) 158.28 -27.33 Lower the better

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The WorldCom Scam

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What exactly happened ?

● Fraud of $3.85 billion starting from 1999 to 2002 in Telecom firm WorldCom, the No. 2 U.S.
long-distance telephone and data services provider.

● Few members of company- the CEO, CFO and the Controller attempted to fake an increase the
expenses in the profit and loss statement of the company.

● This was uncovered in June 2002 when the company's internal audit unit, led by vice president
Cynthia Cooper discovered the fraudulent work.

● Filed bankruptcy in July.2002 which was one of the biggest in American history.

● Accused were asked to accept the resignation & charged with “Sentence to jail”.

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A look into reality !!

● It was done to maintain the WorldCom’s stock price and in order to meet the Wall Street targets.

● The CFO of the company included extra expenses (billions of dollars) in operating expenses and
spread into property accounts.

● This thing assured people and investors that expenses in smaller amounts over span of years.

● In 2001, firm tried to inflate the revenue by $3 billion and showed $1.4 billion profit instead of
loss.

● An audit by Vice-President of the company revealed the fraud and involved person (CEO, CFO,
Controller) agreed that these transfers were not in accordance with GAAP.

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What could have been done to prevent it?

● More audit committees, and frequent audits.

● Companies need to revise Audit members and company after 3 years.

● Internal controls for public companies.

● Huge criminal penalties for fraudulent act.

● BOD need to be more active and involving in the accounting process.

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Thank You!

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 Peer Rating
Name Email Peer Rating
Subham Sinha Shubhsinha52@gmail.com 6

ROHIT KUMAR ROHITK2708@GMAIL.COM 7

CHANDRAVANSHI SHUBHAMKUMAR PAWANKUMAR shubham25298@gmail.com 4

Shubham Shekhar shubhamshekhar1011@gmail.com 9

Avinash Kumar avinash29sonu@gmail.com 2

Parvati K Nair nairparvati2000@gmail.com 5

Shakti Singh shaktisingh.01996@gmail.com 3

Yalla Revanth Pratap Naidu revanthyalla123@gmail.com 10

MD Shahid Shahid100396@gmail.com 8

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