ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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BATA INDIA-Deterioration of Margins

BATA INDIA has suffered a sharp setback in its working results for 1988 due to the lock-out in Batanagar factory and picketing of company's shops in eastern India. Although net sales turned out to be a shade higher at Rs 255 crore against Rs 254 crore, in the previous year, gross profit slumped to Rs 4.81 crore from Rs 8.82 crore, showing severe deterioration of margins. Net profit dropped from Rs 3.87 crore to Rs 1.41 crore. Dividend has been reduced from 15 per cent to 10 per cent which is covered 1.88 times by earnings as against 1.47 times previously. There were a series of industrial relations upheavals at the Batanagar factory with frequent stoppages, disruption of work, go slow tactics, etc, culminating in a lock-out at the unit. The factory remained closed for a period of four months during July-November 1988 before a satisfactory settlement was achieved. A long-term settlement has been achieved with the Union which provides, inter alia, for acceptance of technological changes in the manufacturing processes With this settlement, the overall industrial relations climate is expected to improve, making the Batanagar unit more manageable and viable and thereby contributing to the overall prosperity of the company. The directors feel that decline in profit in 1988 may be considered a small price to pay for achieving a satisfactory settlement which will have long-term advantages for the company's growth and prosperity. Commercial production at the new factory in Pecnya Industrial Area near Bangalore commenced during the year.

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