Bata India's share price fell 7 percent on BSE on Thursday after the firm reported weak earnings for the December quarter. The company's profit declined 77.7 percent to Rs 26.4 crore in Q3 from Rs 118.3 crore in the corresponding quarter of the previous fiscal.

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The closure of retail outlets took a huge toll on the top line of Bata, however, on a QoQ basis, the performance was better backed by improved sales during the festive season. It had posted a net loss of Rs 44.3 crore in the September quarter on the back of the COVID-19 pandemic.

The stock fell as much as 6.8 percent to day's low of Rs 1,462 per share on BSE.

"Owing to decline in Covid cases and vaccine rollout, the overall market sentiment is improving significantly. Backed by good festive sales and our targeted consumer outreach, our sales have recovered to 74 percent of pre-Covid levels,” the company said post the earnings announcement.

The firm's revenue fell 26 percent YoY to Rs 614.70 crore for the quarter under review while the EBITDA declined 55 percent YoY to Rs 117 crore. Margins also fell to 19 percent owing to unfavourable product mix.

The management further said it continued to double-down on its focus on cost-savings measures by working closely with landlords for store rentals optimisation, controlling discretionary spends and looking for productivity-enhancing measures.

Brokerages were also bullish on Bata post the numbers.

"Bata India Q3 FY21 revenues recovered to 74 percent of pre-COVID levels at Rs 614.7 crore. It grew by 67 percent QoQ mainly on account of higher festive sales and target customer outreach. Sales through digitally-enabled platforms like the Bata website, online marketplaces, Bata ChatShop, Bata Home Delivery and Bata Store on Wheels contributed over 15 percent of total revenues," Sharekhan said in a note. It maintains a 'buy' rating on the stock with a revised price target of Rs 1,765.

Meanwhile, ICICI Securities believes that with its strong brand patronage and pan-India retail reach, Bata India should be able to revive its revenue growth trajectory as and when the impact of the COVID-19 is phased out.

(Edited by : Ajay Vaishnav)