Top Stock Pick For 2025 - 'Buy' Metro Brands For An Upside Of 20%: Motilal Oswal

Motilal Oswal Report

Metro Brands Ltd.’s stock performance has been flattish in CY24 and has underperformed benchmark indices due to both internal and external factors. Internal factors included:

1. the liquidation of old FILA inventory, which impacted gross margins, and

2. a decline in revenue per sq. ft., driven by a lower share of Crocs in the incremental store rollouts.

External factors included:

1. challenges arising from the BIS implementation, which led to delays in the FILA expansion, and

2. overall demand weakness in the footwear category.

However, we believe these are short-term bumps and remain optimistic about the long-term outlook for Mdtro Brands, given its:

1. strong runway for growth, funded through internal accruals, and

2. superior execution and store economics, as reflected by its healthy RoIC of 30%+.

We reiterate our Buy rating with a target price of Rs 1,460 (based on 70 times Dec’26E P/E).

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