Buy Metro Brands; target of Rs 1500: Emkay Global Financial

Buy

Emkay Global Financial's research report on Metro Brands

Metro’s Q3 results were largely inline – Revenue growth inched up to doubledigits (11%), aided by recovery in revenue per sqft (vs declining trend), ~9% network expansion, and faster ~37% growth in the e-com channel (~11% of sales). With EOSS and higher number of weddings, Metro expects to sustain the improving growth trajectory in Q4. It expects to offset the miss on FY25 expansion outlook with accelerated openings in FY26, helped by normalization of rentals and shift of mall openings to Q1FY26. Notably, Metro also expects normalization of the supply-chain for its scalable S&A ventures (FILA/Foot Locker), with grant of BIS certificate to a few players in Vietnam/Indonesia and a domestic sourcing set-up for FILA. With such scalable partnerships, Metro expects the 15-18% topline CAGR to continue for the next 3-5 years. Also, WC optimization has picked up, with ~6 days of reduction (vs Sep-24 end), matching our estimate.

Outlook

Owing to the in-line Q3, there is no material change in our estimates; retain BUY and TP of Rs1,500 (70x Dec-26E EPS).

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Metro Brands - 20012025 -emkay