Batch command to use the first line of txt file to create a file

I would specify the names not before the corresponding lines with parameters, but after them. If the name goes first, the processing is going to be more complex: you need to check if it's the first line or not, because if it is not, you first need to use a previously stored name to merge the pending output files and only then store the new name. Also, when you reach the end of data.txt, there'll be no name of file line to trigger the merger of the last set of output items. In contrast, if the name goes after the params, you just use it there and then, you don't even need to store it.

Probably you could do it like this:

1. Store %%A in a variable.

2. Try removing name of file:  from the stored value (using the set var=!var:substr=! syntax).

3. Compare the resulting value with %%A.

4. If the two values remain identical, then there was no name of file:  substring in %%A, which means it's a parameter list line, not a file name line. (I do hope you are not going to ever use that signature string as a parameter set.) In this case,

   • just call the .exe file to process the params, like you are doing presently.
      

5. If the values turned out different, then the line contain a name. Therefore,

   • if it's not the first name, process the output files using a previously stored name;

   • store the name just obtained for later use;

   • set a flag indicating that the following name will not be the first one.

6. After the loop, process the old name if the flag is set.

Below is my attempt at implementing the above list of steps:

SETLOCAL EnableDelatedExpansion
SET NotTheFirstName=

FOR /F "tokens=*" %%A IN (data.txt) DO (

  SET "name=%%A"
  SET "name=!ext:name of file: =!"

  IF "!name!"=="%%A" (
    XYZ.exe %%A
  ) ELSE (
    IF DEFINED NotTheFirstName (
      do whatever you need with !oldname!
      to process your output files
    )
    SET "oldname=!name!"
    SET NotTheFirstName=1
  )
)
do whatever you need with !oldname! once again
(to account for the last set of output files)

Note that if data.txt was formatted like this:

abc 1 2
xyz 2 3
name of file: mp3
sss 1 2
rrr 2 3
name of file: mp4
eee 1 2
qqq 2 3
name of file: vob

i.e. if the file name line was after the param lines it pertained to, the script would be much simpler:

SETLOCAL EnableDelatedExpansion

FOR /F "tokens=*" %%A IN (data.txt) DO (

  SET "name=%%A"
  SET "name=!ext:name of file: =!"

  IF "!name!"=="%%A" (
    XYZ.exe %%A
  ) ELSE (
    do whatever you need with !name!
    to process your output files
  )
)

As you can see, there's no need to store the name for use at a later iteration, because the output is processed just there and then. And, consequently, there's no need for any flags or for using the name once again just after the loop.