Accumulate Metro Brands; target of Rs 1231: Prabhudas Lilladher

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26 Aug, 2025 12:21

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MBL has created a pure retailing model in footwear with 766 stores across segments, price points and geographies with brands like Metro, Mochi, Walkaway, Crocs and Fitflop. We believe there is a huge runway for growth given 1) presence in just 174 cities (Bata/ Tanishq 388/257) 2) rising online salience (8% of sales, 32% CAGR) 3) focus on mid premium segment (15ppt higher sales share of products with MRP>3000 since2020) and 4) new brands licenses/acquisitions (Crocs, FILA, Fitflop, Birkenstock, Cheemo). MBL has acquired FILA license for India and plans to scale this up like it has done with Crocs in the past. Post re-launch FILA will add another dimension to company’s growth prospects, although it will drag the performance in FY24 (Rs278mn loss in 4Q23/1Q24). We expect 355 net store additions including FILA over FY23-26E and 6% sales CAGR per store post FY24 (1.1% only). We estimate Sales/EBIDTA/PAT CAGR of 20.1/19.3/18.7% for FY23-26E. Though FY24 will remain depressed with 7.3% PAT growth, yet we expect 24.8% CAGR over FY24-26. MBL trades at 60.1x/48.7x FY25/26 EPS which is at a premium to other footwear players given growth visibility and past track record. Initiate with ‘Accumulate’ rating.

We are initiating coverage on Metro Brands (MBL) with ‘Accumulate’ rating and DCF based TP of Rs 1231 (48.7x FY26E).

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