For most Indians, Bata isn't just a shoe brand. It's the place where your school shoes came from, the one with the slightly stiff leather and the unmistakable smell of a new pair fresh out of the box. It's been around for almost a century. And for a long time, that legacy was its biggest strength. Lately though, it's starting to feel like a weakness. Bata's stock has fallen over 44% in the last year. Profits have collapsed. And its rivals, Metro Brands and Relaxo Footwears, are either growing faster or making a lot more money on every pair sold. So Bata just did something it hasn't really done before: it looked outside the footwear industry entirely and hired someone who built his career at Nike and helped Zara enter India. His name is Sanjay Rao, and he has a five-year mandate to figure out how to make a century-old brand feel young again. ## The New Boss Rao takes over as CEO from October 1, 2026, after a short transition period starting August 24. His resume is the interesting part. He spent over two decades in retail across India, South Asia, China and Europe. Most recently, he ran Nike's France and Benelux business. Before that, he was instrumental in setting up Zara's India operations through Tata's joint venture. That combination matters. Nike knows how to sell aspiration. Zara knows how to move fast, restock trends quickly, and avoid sitting on dead inventory. Bata, frankly, has historically struggled at both. Bringing in someone fluent in that playbook is a clear signal: the company wants to stop being seen as "the school shoe brand" and start competing for the same wallet as sneaker and lifestyle brands. ## The Numbers Tell an Uncomfortable Story Here's why this hire couldn't have waited. In the most recent quarter, Bata's net profit fell 60% year-on-year, dropping to just ₹134 crore from ₹331 crore. Margins shrank too, with net profit margin slipping from nearly 10% to about 4%. Meanwhile, the stock trades at a price-to-earnings ratio of nearly 65 times, which is a steep valuation for a company whose earnings are shrinking, not growing. The market is essentially betting on a turnaround story rather than rewarding current performance. To be fair, the outgoing leadership wasn't sitting idle. Under former CEO Gunjan Shah, Bata actually made real operational progress. - Online sales jumped 81% year-on-year. - Inventory was trimmed by 28% while product availability in stores improved noticeably. - The brand expanded its reach to over 1,600 towns through more than 15,000 outlets. The problem is that fixing the back end (supply chain, distribution, digital) doesn't automatically fix the front end (why someone chooses Bata over a Nike, a Skechers, or a trendy D2C sneaker brand). That second problem is squarely what Rao has been hired to solve, and getting there came at a cost: a one-time VRS expense of ₹28 crore and a 50% jump in marketing spend, both of which hit short-term profits hard. ## The Competition Isn't Waiting Around To understand why this matters, it helps to look at how Bata stacks up against its two closest listed rivals. | Metric | Bata India | Relaxo Footwears | Metro Brands | |----------|----------:|----------:|----------:| | Market Cap | ₹8,721 Cr | ₹9,068 Cr | ₹27,853 Cr | | Revenue (FY25) | ₹3,488 Cr | ₹2,790 Cr | ₹2,507 Cr | | Revenue Growth | +0.3% | -4.3% | +6.4% | | Net Profit Margin | 7.5% | 6.1% | 17.6% | | EBITDA Margin | 18.3% | 13.7% | 29.8% | Three very different stories show up in this table. ### Metro Brands Metro Brands is the clear profitability leader. Despite having the smallest revenue of the three, it commands by far the highest market valuation, nearly triple Bata's. The reason is simple: it keeps almost 18% of every rupee of revenue as profit, more than double Bata's margin. Its portfolio of Metro, Mochi, Crocs, FILA and Foot Locker leans premium, and premium pays. ### Relaxo Footwears Relaxo Footwears sits at the other end. It sells more pairs of footwear than anyone else in the country, 17.75 crore pairs in FY25 alone, and carries almost no debt. But its revenue actually shrank last year, a sign that the mass-market segment it dominates is under real pressure, possibly from cheaper unbranded competition and shifting consumer tastes. ### Bata India Bata is stuck in between. It has the most revenue of the three but the weakest profit-growth story right now. It's neither as premium as Metro nor as dominant in volume as Relaxo. That "stuck in the middle" position is exactly what Rao's hiring is meant to fix. ## What Bata Is Betting On The transformation plan has a few clear pillars. ### Going Upmarket Bata wants 20% of its business to eventually come from the casual and sneaker category, the same ₹3,000–₹5,000 price band where younger, brand-conscious shoppers are spending more. It's also rolling out a new "Red Concept" store format designed to look and feel more like a modern lifestyle retailer than a traditional shoe shop. ### Moving Faster Online sales currently make up only about 12% of Bata's revenue. Given Rao's Zara background, expect a push toward quicker product cycles and more frequent collection refreshes, the kind of fast-fashion logic that keeps customers checking back often instead of visiting once a year for school shoes. ### Staying Everywhere Unlike Metro, which has built its growth around fewer than 1,000 premium showrooms, Bata's edge has always been its sheer footprint, nearly 2,000 stores reaching deep into smaller towns. The bet is that this distribution advantage, combined with a sharper, younger brand image, can do something neither Metro nor Relaxo can easily replicate. ## The Bigger Picture Step back, and this isn't just a Bata story. It's a story about what's happening to footwear buying in India more broadly. People aren't just buying shoes to protect their feet anymore. They're buying a look, a brand, an identity. That shift is exactly why Metro's premium bet is paying off, why Relaxo's mass-market volume game is getting tougher, and why Bata felt the need to bring in outside talent rather than promote from within. Sanjay Rao's appointment is a bet that Bata's biggest asset, its reach into nearly every corner of India, can be combined with the brand-building instincts of Nike and the operational speed of Zara. If it works, Bata could end up the rare legacy brand that successfully reinvented itself. If it doesn't, the gap between it and faster-moving rivals like Metro Brands will likely keep widening. Either way, the next few quarters of Bata's earnings calls just got a lot more interesting to watch. --- *This article is for informational purposes only and does not constitute investment advice. Financial figures are based on the most recently reported quarterly and annual results.*