Hold Metro Brands; target of Rs 1177: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Metro Brands with a target price of Rs 1177 in its research report dated January 16, 2025.

Broker Research

January 20, 2025 / 11:57 IST

Hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Metro Brands

We cut our FY25/26/27 EPS estimate 2.4/4.1/4.5% given 1) persistent tepid demand 2) Tepid store economics led by lower SSG & opening up of store in Tier-2 & Tier-3 cities & 3) BIS issues continue to affect high-end international brand imports. However, MBL operating parameters are on track with 1) addition of 5 new cities in 3Q (3 in Q2) & 40 in FY26 2) healthy online/ Omni channel salience of ~11% to sales with strong growth of 37% YoY and 3) increase in share of >3000 MRP sales by 100ppt YoY to ~54% of sales. Longterm growth strategy is in place led by 1) geographical and store expansion (225 stores in 2 years) 2) brands licenses/acquisitions (Crocs, Fitflop, Birkenstock, New Era) 3) re-launch and scale up in FILA/ footlocker from FY26.

Outlook

We believe that valuations at 69.2xFY27 do not leave any upside in short term. Expect back-ended returns given rich valuations and demand, Retain Hold.

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