Bata India Ltd

• Fixed Deposit Programme Rating : FAA(Reaffirmed)

The ‘FAA’ (pronounced ''F double A’) rating assigned to the Fixed Deposit programme of Bata has been reaffirmed.

The rating reflects the sustained improvement in the company’s risk profile resulting from the successful implementation of the turnaround strategy initiated by the company’s new management; the company’s strong market position in the Indian footwear industry; its improving operating efficiency and financial risk profile. The rating is, somewhat, tempered by the instances of indiscipline by its workforce in the past and the company’s moderate operating margins. The rating also factors in the company’s strong relationship with its parent, Bata Shoe Organisation.

Bata India Limited (Bata) is the largest footwear manufacturer in the country and produces a wide range of footwear such as canvas, rubber, leather, plastic etc. While the company’s risk profile had deteriorated in the mid 1990s due to the limited success of the it’s strategy of shifting business focus towards the higher valued added segments, the company has subsequently successfully implemented the business restructuring exercise strategy initiated by it in 1995. The turnaround strategy has been aimed at reverting its focus back onto its well-established positioning on the ‘high volume - value for money’ segment; streamlining the marketing and organisational set-up; augmenting information systems and improving labour productivity. During the year ending December 31 1998, the company reported a PAT of Rs. 238.2 million on a net sales of Rs. 7061.8 million.