Metro Brands posts operationally weak results for Q3; stock slips

Metro Brands shares slipped over 5 per cent on the BSE and touched the day's low of Rs 1,140.6 apiece.

The stock came under selling pressure after the company posted operationally weak Q3 FY24 numbers on a year-on-year (YoY) basis.

As of 10:10 a.m., shares of Metro Brands traded 3.41 per cent or Rs 41, lower at Rs 1,161 apiece. The market capitalisation of the company stood at Rs 31,563.58 crore at around the same time. The scrip closed 2.66 per cent lower at Rs 1170 apiece.

On Thursday, post-market hours, the Mumbai-based footwear retail company posted a decline of 12.6 per cent in its consolidated net profit at Rs 99 crore for the third quarter that ended on December 31, 2023, against Rs 113 crore a year ago. 

The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs 200 crore for the quarter under review against Rs 205 crore in the corresponding quarter of the previous fiscal, down 2.8 per cent YoY.

The company's margin stood at 31.36 per cent against 34.30 per cent in the year-ago period. On the other hand, revenue increased by 6.1 per cent to Rs 636 crore against Rs 599 crore.

ICICI Securities has maintained an 'add' rating on the stock for a target price of Rs 1,350 apiece.

"We maintain our earnings estimates for FY24–25E. We model revenue / EBITDA / PAT CAGR of 20% / 18% / 17% respectively, over FY23–FY25E. Maintain ADD rating with a DCF-based revised target price of INR 1,350 (vs INR 1,300 previously). Key risks are (1) delay in store addition and (2) likely increased competition from regional players trying to premiumise," the brokerage said in its report.

Metro Brands share price: Past performance

In a year, shares of Metro Brands have gained over 32 per cent against the Nifty 50's rise of over 19 per cent.

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