Bata (I) banks on technology from parent to raise margins

Kolkata, June 6: FACED with a steep decline of over 100 per cent in net profit during fiscal 2000, the Rs 761-crore Bata India Ltd on Wednesday said it was trying to improve margins.

“Once the technical expertise was obtained from the parent company Bata Shoe Organisation, we will be able to improve our profits,” Bata India chairman Mr AL Mudaliar said. Steps were being taken to reduce costs, improve distribution logistics and focus on launch of new products in order to significantly improve the performance of the company, Mudaliar said during the company’s 68th Annual General Meeting here.

The company had identified upgradation of retail outlets and modernisation of plant as an important area for which the funding would be made from internal accruals and borrowings.

Streamlining the wholesale business would be one of the major areas for concentration and it would be revamped, he said.

Mr Mudaliar said sluggish conditions of the market during the last fiscal was responsible for the decline in profits and the company was in the process of chalking out an aggressive marketing plan to beat the rivals in a fiercely competitive industry. During 2000, Bata India achieved a turnover of Rs 760.15 crore and recorded profit before tax of Rs 25.30 crore, but fortunes slipped sharply during the first quarter of current year.

“Although retail sales increased by five per cent, both in value and volume, wholesale sales declined primarily due to restriction of supplies as a means to recover customers’ outstandings,” he said.

Resistance of consumers to price rise in popular products as well as discounts to clear slow-moving stocks and under-utilisation of production capacity adversely affected the operational results though it managed a net profit of Rs 15.60 crore in the previous fiscal against Rs 30.46 crore in 1999. (PTI)