Rakesh Jhunjhunwala portfolio stock: Brokerage sees over 20% upside Metro Brands shares; lists key triggers

Billionaire investor Rakesh Jhunjhunwala-backed Metro Brands’ shares have a potential to surge over 20 per cent from the current levels, brokerage firm Equirus stated in its report while initiating a Buy coverage on the stock. It puts a target price of Rs 726 on the scrip. 

Metro Brands has been one of India’s fastest-growing footwear retailers over the last decade led by a strong brand portfolio with a presence across categories and price points. This makes it a one-stop shop for complete family footwear needs, the brokerage said in its report. 

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Asset-light model, superior store economics, and efficient inventory management ensured strong cash flow generation for the company, providing it with the required ammunition to scale up aggressively, the brokerage also said while stating its strong fundamentals. 

The brokerage builds in a 12.4/14.4/19 per cent revenue/EBITDA/PAT (profit after tax) CAGR (Compound Annual Growth Rate) respectively, over FY20-FY25E driven by aggressive addition of around 246 stores over FY23-FY25E with some expansion in margins.  

The stock on Wednesday closed flat with a negative bias to Rs 595.1 per share on the BSE, as compared to a nearly 1 per cent fall in the S&P BSE Sensex. The stock since its listing on December 22, 2021, has gained over 20 per cent and gained over 31 per cent year-to-date on the BSE. 

Rakesh Jhunjhunwala, who is also known as the Big Bull of the Indian stock market, along with his wife Rekha and associates held 39,153,600 shares, which translates to about 14.4 per cent stake in the footwear company, as per the December 2021 shareholding pattern available on the BSE. 

The ace investor Rakesh Jhunjhunwala along with associates publicly holds 36 stocks with a net worth of over Rs 34,888.5 crore, as per the stock analysis website trendlyne.com.