Industry Profile: India is the second-largest footwear producer in the world, with footwear production accounting for approximately 9 percent of the annual global output – 22 billion pairs as compared to China, which produces over 60 percent of the worldwide production. India annually has 2.1 billion pairs, of which 90 percent are consumed internally. At the same time, the remaining are exported primarily to European nations, including the United Kingdom, Germany, USA, Italy, and France, as per market analysts. Footwear exports from India have grown at a CAGR of 20 percent in Indian Rupee terms during the last five years, backed by growing demand from European nations and increasing focus of major importing countries to shift sourcing from China to other low-cost producing countries.

In absolute terms, footwear exports from India have risen from Rs. 71.5 billion in FY10 to Rs. 180.0 billion in FY15. The growth in the Indian fashion and lifestyle market has also impeded the footwear industry. As a result, it has become an evolving fashion and style category from primary need-based industry.

The footwear market in India, like its international counterpart, has always been broadly classified into three segments, Men, Women, and Kids. The men’s market is growing at a CAGR of 10 percent. Currently, the men’s market contributes around 60 percent of sales in the footwear segment as against women’s share of 30 percent. The women’s part, however, is growing at a much faster CAGR of 20 percent. Therefore, based on the usage, the market can be divided into two sub-categories:

Regular (consisting of daily and sports footwear, the material can be leather/non-leather)
Occasional (consisting of premium and luxury, the material can be leather/non-leather)
From the price point, the footwear industry in India can be divided into five parts:

Mass (Rs 150-700)
Mid/Economy (Rs 700-1000)
Active Sports (Rs 1000-3000)
Premium (Rs 3000-5000)
Luxury (Above Rs 10,000) segment

Company Profile: The company was incorporated in 1931 and is based in Gurugram, India. Bata India Limited is a subsidiary of Bata (B.N.) B.V. The company was formerly known as Bata Shoe Company Private Limited and changed its name to Bata India Limited in 1973. Bata India Limited manufactures and trades in footwear and accessories through its retail and wholesale network in India. The company offers footwear in the categories of women, children, youth, sports, and men; accessories, such as belts, wallets and clutches, handbags, and shoe care products for men, women, and kids. It sells its products primarily under the Bata, Bubblegummers, Bata Comfit, Footin, Disney, Hush Puppies, Marie Claire, Naturalizer, North Star, Power, Scholl, and Weinbrenner brands. The company operates through approximately 1,375 retail stores. It also exports its products.

Shareholding pattern: BSE Filing

Financials and ratios: [table id=221 /]

Future prospectus: Many of India are still young and will use footwear and shoes. Though there is significant competition and the footwear market is not where you can expect customer loyalty, Bata is still a well-known company. Some customers may be loyal, but not all.