Metro Brands Soars 5% on Strong Q3 Earnings; Brokerages Bullish

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AuthorKavya Nair|Published at:
Metro Brands Soars 5% on Strong Q3 Earnings; Brokerages Bullish
Overview

Metro Brands shares surged 5.3% after reporting a robust Q3FY26. The footwear retailer posted a 35% rise in net profit to ₹128.35 crore on a 15.3% revenue increase to ₹811.27 crore. Brokerages largely maintained positive stances, citing store expansion and growth prospects, despite minor target adjustments.

Q3 Performance Highlights

Metro Brands reported a significant jump in its December quarter performance, with consolidated net profit surging 35 per cent year-on-year to ₹128.35 crore. This growth was underpinned by a healthy 15.3 per cent increase in revenue, which climbed to ₹811.27 crore from ₹703.09 crore in the same period last year.

Brokerage Outlooks

Following the release of these results, brokerages largely reiterated their positive outlooks on Metro Brands, even as some adjusted their price targets. Emkay Global Financial Services maintained a 'Buy' rating but trimmed its target to ₹1,300 from ₹1,375, factoring in lower other income due to a special dividend payment. The firm cited GST reduction and an improving outlook for the Walkway format, expecting growth to continue its upward trend, further bolstered by aggressive store expansion and potential margin gains from operating leverage and the FILA turnaround.

Motilal Oswal Financial Services also kept a 'Buy' recommendation with a revised target of ₹1,315 from ₹1,400. They noted accelerated revenue growth since H2FY25, driven by e-commerce traction and store additions. While acknowledging challenges in the S&A category, the brokerage highlighted the company's strategic focus on the value segment (Walkway) and new formats. Motilal Oswal projects a compound annual growth rate of 15 per cent in revenue and 16 per cent in EBITDA over FY25-28E, confident in the company's long-term prospects underpinned by superior store economics and strategic tie-ups.

JM Financial Institutional Securities echoed this positive sentiment with a 'Buy' rating and a target of ₹1,370, down slightly from ₹1,385. They observed resilient operational performance and robust store expansion, with 35 gross openings in the quarter. However, JM Financial reduced its earnings per share estimates for FY26-28 by 4-6 per cent due to anticipated delays in portfolio ramp-up caused by BIS implementation challenges in the S&A category. Despite these adjustments, the consistent double-digit revenue growth underscores the company's strong market standing.

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