Bata India Limited
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Briefing
Bata India Limited — the brief
Forensic posture: Material flags. Bata India has clean audit opinion but faces 2 material flags: delays in statutory dues (professional tax, provident fund, ESI) and several hundred million rupees in disputed tax demands across multiple regimes; related-party transactions show concerning patterns including a fully-impaired ₹45.78 Cr subsidiary loan and a 63% jump in parent dividend to ₹1,418.24 Cr, yet contingent liabilities are modest at ₹237.93 Cr (1.5% of net worth) and earnings quality is strong at 83/100.
Auditor’s report (CARO 2020)
Auditor’s assessment Material flags. Auditor: Price Waterhouse Chartered Accountants LLP. Opinion: Unqualified. Fiscal year FY24-25. 0 critical, 2 material, 0 minor flags.
- Delay in statutory dues deposit: The Company has delays in depositing professional tax and some delays in provident fund and ESI payments, though generally regular for other statutory dues.
- Disputed statutory dues pending: The Company has material disputed statutory dues totalling several hundred million rupees pending before various appellate authorities across multiple tax and regulatory regimes.
Related-party transactions
Assessment Concerning. 38 related parties disclosed. Fiscal year FY25.
- Unsecured loan given to subsidiary with full impairment: Way Finders Brands Limited has an outstanding loan of INR 45.78 Cr from parent, fully impaired, repayable on demand at 8% p.a., indicating potential solvency stress in the subsidiary.
- Substantial dividend paid to parent company: Dividend of INR 1,418.24 Cr paid to BATA (BN) B.V. in FY25 (vs INR 870.28 Cr in FY24), a 63% increase, during the year.
- Significant ongoing technical collaboration payments: INR 560.99 Cr paid as technical collaboration fees to Global Footwear Services Pte Ltd during FY25, part of ongoing group support services.
- Receivables from related parties carry impairment risk: Outstanding receivables from related parties amounting to INR 12.78 Cr with loss allowances, including INR 3.66 Cr credit-impaired amount from Way Finders Brands Limited.
Contingent liabilities
Assessment Routine. Total disclosed: ₹238 Cr (1.5% of net worth). Fiscal year FY24-25.
Corporate governance
Board of 0 directors. Statutory auditor: Price Waterhouse Chartered Accountants LLP. Fiscal year FY24-25.
“The particulars of other statutory dues referred to in sub-clause (a) as at March 31, 2025 which have not been deposited on account of a dispute, are as follows: [detailed table of disputed amounts across multiple statutes]”
What retail misses·The statutory dues delays (professional tax, PF, ESI) and disputed tax demands bundled in CARO Annexure are not captured in headline earnings—they sit as contingent liabilities but signal compliance friction; the ₹45.78 Cr impaired subsidiary loan and the dramatic dividend jump reveal related-party capital extraction that doesn't show up in per-share metrics on Screener.
Strengths noted in disclosures: Unqualified audit opinion from Price Waterhouse despite material flags; no HIGH severity findings from CARO. · Contingent liabilities benign at 1.5% of net worth (₹237.93 Cr against ₹15,749.63 Cr net worth); tax disputes are routine low-severity items. · Earnings quality composite score 83/100 (Excellent); Altman Z of 4.07 in Safe zone; cash flow tracks profit closely (Beneish low manipulation risk); top-decile profitability per Novy-Marx.
Forensic signal
From the company's own filingsWeak: 52-Week · Valuation · Yield