Buy Metro Brands; target of Rs 1460: Motilal Oswal

Buy

Motilal Oswal's research report on Metro Brands

Metro Brands’ (MBL) stock performance has been flattish in CY24 and has underperformed benchmark indices due to both internal and external factors. Internal factors included: a) the liquidation of old FILA inventory, which impacted gross margins, and b) a decline in revenue per sq. ft., driven by a lower share of Crocs in the incremental store rollouts. External factors included: a) challenges arising from the BIS implementation, which led to delays in the FILA expansion, and b) overall demand weakness in the footwear category. However, we believe these are short-term bumps and remain optimistic about the long-term outlook for MBL, given its: a) strong runway for growth, funded through internal accruals, and b) superior execution and store economics, as reflected by its healthy RoIC of 30%+.

Outlook

We reiterate our BUY rating with a TP of INR1,460 (based on 70x Dec’26E P/E).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Metro Brands - 01012025 - moti