Metro Brands - Adding Feet’s To The Marathon: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Metro Brands Ltd. trades at rich valuations, at price/earning of 55 times on FY26 estimates, backed by: a strong runway for growth, largely funded through internal sources, given its strong operating cash flow-to-Ebitda ratio of over 50%; andsuperior store economics reflected in the balance sheet and a healthy return on invested capital of +50%. We believe the incremental opportunity in Fila and Foot Locker can further accelerate growth for Metro Brands, which is not captured in the valuation. We factor in 21%/26% growth in revenue/Ebitda for FY24-26E and assign, PE of 60 times on FY26E profit after tax of Metro Brands’ existing portfolio. We have not factored Fila and Foot Locker earnings, but we believe they have revenue potential of Rs 15-20 billion over the next three-five years (i.e. 30-40% share of Metro). Since both the brands are at initial stage of investing, we value Fila/Foot Locker at a ~75% discount to the potential value which creates an option value of Rs 160, thus arriving at a valuation of Rs 1,530 per share..Click on the attachment to read the full report:.Ashoka Buildcon - Awaiting Asset Monetisation: IDBI Capital.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Metro Brands - Adding Feet’s To The Marathon: Motilal Oswal

We believe the incremental opportunity in Fila and Foot Locker can further accelerate growth for Metro Brands, which is not captured in the valuation.

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