Metro Brands Q3 Results Review - Demand Remains Tepid, All Eyes On FY25: Prabhudas Lilladher

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..Prabhudas Lilladher Report.We cut Metro Brands Ltd.'s FY25/FY26 earnings per share estimates by 3.7/5.2% given-tepid demand environment,longer than expected time to finish old inventory and launch new range/stores in FILA with ramp up slower than earlier estimates andincrease in opex ahead of FILA/ Footlocker store launch. Metro Brands continued to sustain operating parameters with-addition of 15 new cities in nine months-24 (three in Q3),increase in online/ omni channel salience to 10% of sales without aggressive discounting,500 bps higher share of sales with MRP more than Rs 3000 in in Q3,on tract to open 100 stores in FY24 with 87 store already opened in 9M FY24 (added 31 stores in Q3). While long term growth strategy is in place led by-geographical and store expansion,brands licenses/acquisitions (Crocs, Fitflop, Birkenstock),re-launch and scale up in FILA/ footlocker from FY25/26. We believe store closures in FILA by Q1 FY25 will curtail losses from Q2 FY25 (Rs 150 million in Q3 FY24 (Rs 430 million in 9MFY24) although losses might remain high in Q4/Q1 on high discounting and store closures. .We expect 250 net store additions including FILA and 6.3% sales/store CAGR over FY24-FY26, however we expect this to decline by 4.2% in FY24. We estimate sales/Ebitda/PAT CAGR of 20.3/21.5/26.1% for FY24-26E. Though FY24 is likely to remain depressed, hopes of FY25 recovery will help support valuations at 60.9 times FY26. Retain ‘Hold with target price of Rs 1109 (Rs 1187)..Click on the attachment to read the full report:.Metro Brands Q3 Results Review - Disappointing Performance; Downgrade To 'Accumulate': Dolat 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 Q3 Results Review - Demand Remains Tepid, All Eyes On FY25: Prabhudas Lilladher

Fila inventory destocking/ exclusive brand outlet closure likely by Q1 FY25, losses nearly peaked

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