Hold Metro Brands; target of Rs 1268: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Metro Brands with a target price of Rs 1268 in its research report dated September 25, 2024.

Broker Research

September 26, 2024 / 10:30 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Metro Brands

Metro brands saw muted 1Q amid lower wedding days and poor demand however worst seems over as 1) 2Q is showing some green shoots across brands, despite heavy rains impact in some regions 2) 2H25 is expected to show improvement in demand led by festive and marriage season and 3) relaunch of FILA & footlocker. BIS benefits have not flown to domestic players due to higher costs and exemption given to smaller players. However, relaunch of FILA and footlocker stores might be delayed, amid addition of Vietnam & Thailand into non-certified countries. Long- term growth outlook remains intact led by 1) geographical and store expansion (225 stores in 2 years) and 2) brands licenses/acquisitions (Crocs, Fitflop, Birkenstock, New Era Caps, and Footlocker).

Outlook

We expect Metro to return to double digit PBT growth in FY25 and 18.6% CAGR over FY25-27. Metro seems well placed among listed footwear players to ride India growth story, however valuations at 69.5xSept26 will limit immediate upside. We assign Hold rating (Under review earlier) and recommend accumulating stock on dips for LT gains.

For all recommendations report, click here