Metro Brands is a small-cap footwear stock with a market capitalization of ₹22,520.2 crore. Metro brands are one of the largest Indian footwear and accessories specialty retailers and are among the most aspirational Indian brands in the footwear category. The company opened its first store under the Metro brand in Mumbai in 1955.
As of March 31, 2021, Metro brands operated 644 stores in 147 cities across 30 Indian states and Union territories, its website shows.
Metro Brands made its stock market debut on December 22, 2021. The company raised ₹1,367 crore by issuing shares at a price of ₹500 per share. The stock hit a record high of Rs. 939.90 on August 11, 2022. The stock has increased by 69.8 percent since its listing.
In the last 11 trading sessions, the stock is up by 15.19%. It is currently trading 99.29% higher than its 52-week low of Rs. 426. The stock price went from ₹582.40 to ₹849.85 in the last month, delivering a return of 45.92 percent.
Furthermore, the stock gained more than 48.65% in the last six months, in contrast to the movement in the Nifty500 index, which rose 4.25% in the same period.
The company reported a consolidated net profit of ₹105.78 crore in the June-end quarter as against a net loss of ₹12.13 crore in the year-ago period.
It reported a 250% increase in revenue to ₹517.2 crore from ₹147.3 crore in the April-June quarter of last year.
In Q1FY23, the operating profit increased to ₹182.9 crore from ₹14.6 crore. The EBITDA margin for the June quarter stood at 36.00%.
The company's total expenditure during the June 2022 quarter jumped to ₹325.1 crore compared with ₹116.8 crore in the corresponding period last year.
Further, Metro Brands has a return on equity of 18.31% and a ROCE of 23.44% (5-year average) respectively. It has a price-to-earnings ratio of (11.83x) compared to the peer average of (115.18x). According to data from Trendlyne, the company has zero debt.
On June 03, ICICI Securities Initiated a 'buy' call on the stock with a target price of ₹700/share.
Given the underlying trend of e-commerce adoption in the footwear space, Metro Brands has ramped up capabilities (8% contribution), with separate platforms for its three umbrella brands. Besides, it is also ramping up its digital presence (consumer connect), it said.
ICICI securities believes that the store addition is likely to be the key driver of growth for Metro Brands. In the next three years, the company is looking to open 260 new stores, which is equivalent to 40%+ of its existing store print.
The brokerage firm noted that on a gross basis, Metro Brands has added 298 stores in the last four years. "It is also in the process of strengthening retail presence through franchisees for the Walkway brand," ICICI Securities said.
Rakesh Jhunjhunwala along with his wife Rekha combined holds about 39,153,600 equity shares or 14.4 per cent stakes in the company, as per June shareholding pattern of the company available on the BSE.
An average of 06 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.