Shares of Metro Brands Ltd. surged over 14% to hit an all-time high on Tuesday amid high volumes.
The stock has gained over 57% so far during fiscal 2024, outperforming its peers during the period. Bata India Ltd. and Relaxo Footwear Ltd. rose 14.38% and 7.39%, respectively, while Campus Activewear shares fell 12.1%.
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Prabhudas Lilladher
Initiates coverage with an 'accumulate' rating and a price target of Rs 1,231.
There is scope for growth due to its presence in 174 cities, rising online presence, focus on the mid-premium segment, and new brand licences and acquisitions.
Expects net store additions of 355 over fiscal 2023–26, with a 6% sales compound annual growth rate per store after the current fiscal.
Estimates of sales and Ebitda 20.1% and 19.3% CAGR, respectively, for fiscal 2023–26.
Profit after tax shows a suppressed growth of 7.3% during the fiscal, with a 24.8% CAGR over fiscal 2024–26.
Shares of Metro Brand were trading 10.42% higher at Rs 1,243.65 apiece, compared to a 0.57% fall in the benchmark NSE Nifty 50 at 2.37 p.m. The stock rose as much as 14.81% during the day to a record high of Rs 1,293 apiece.
The average traded volume so far in the day stood at 21.8 times its monthly average, while the relative strength index was at 76, indicating the stock may be overbought.
Eleven out of the 17 analysts tracking Metro Brands maintain a 'buy' rating on the stock, three suggest a 'hold', and as many recommend a 'sell,' according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 12.1%.
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