Metro Brands - Beneficiary Of K Shaped Consumer Recovery, Good Execution: Nirmal Bang

Nirmal Bang Report

We recently hosted the management of Metro Brands Ltd. for an investor interaction. The company had delivered its best-ever quarter in Q1 FY23 in terms of sales, Ebitda and profit after tax on the back of continued pick-up in customer sentiments post pandemic and significant investments in stores, products, branding, people, processes and technology.

Against the pre pandemic Q1 FY20, sales were up 63% - significantly higher than Bata India Ltd.’s (6.8%) and Relaxo Footwear Ltd.’s (3%).

While we believe there was an element of pent-up demand, Metro Brands stated that growth was sustainable as it was broad-based across its various formats, categories, city-tiers and regions.

While there was a 26% growth in store count for Metro Brands from Q1 FY20, there seems to have been ~9% same store sales growth compound annual growth rate over a three-year period.

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