Rakesh Jhunjhunwala Stocks: This Big Bull-backed footwear stock may grow by 20% on steady growth trajectory, says ICICI Securities

Billionaire investor Rakesh Jhunjhunwala-backed this footwear company – Metro Brands shares have the potential to surge by nearly 20 per cent on the back disciplined and steady growth trajectory, a domestic brokerage firm ICICI Securities said while maintaining a Buy stance on the counter.

Metro Brands is one of the largest Indian footwear speciality retailers present in India and has the right mix of brands, which includes three umbrella brands and two EBO (exclusive brand outlets) tie-ups providing a growth runway in terms of store addition, the brokerage stated.

Ace investor Rakesh Jhunjhunwala, who is also called as the Big Bull of the Indian stock market, holds 39,153,600 equity shares, which translates into a 14.4 per cent stake in Metro Brands, as per the latest shareholding pattern of the company available on the exchanges.

The company is focused on financial discipline along with balance sheet strength provides confidence in the execution, besides, it has an optimized mix of in-house brands and third-party brands in MBOs (Metro, Mochi and Walkway) to drive customer footfalls, improve sales density and gross margins, ICICI Securities said further.

The brokerage sees revenue / EBIDTA (earnings before interest, taxes, depreciation, and amortization) / PAT (profit after tax) CAGR (Compound Annual Growth Rate) of 30 / 28 / 31 per cent over FY22-24E and initiated at BUY with a target price of Rs 700 per share (20 per cent Upside).

In terms of key risks, ICICI Securities said the delay in store addition and likely increased competition from regional players trying to premiums.

The stock on Friday closed by over 0.5 per cent lower to Rs 584 per share on the BSE as compared to flat with negative bias BSE Sensex. The scrip in the last five sessions has jumped nearly 10 per cent, while it has gained around 29 per cent year-to-date.