Metro Brands Q3 Results Review - Positive Surprise; Highest Ever Store Addition: ICICI Securities

ICICI Securities Report

Metro Brands Ltd.’s Q3 FY23 performance was a positive surprise with highest ever store (48 stores) addition till date. This may drive consensus upgrades. Incremental focus towards distribution driven revenue growth under Fila and Proline brands (now consolidated in standalone financials effective Dec 01, 2022) is a key growth vector.

However, we await more clarity on exclusive brand outlet/multi brand outlet mix in the growth plans. As per exit run-rate, these brands likely contribute ~5% to overall revenue.

Relative success in ramping-up own brands (revenue contribution at 74% versus ~70% during FY17-19) is encouraging. Sequential deflation in input-cost is incremental positive.

Metro Brands’ right mix of brands provide growth runway (of store addition). Its focus on financial discipline along with balance sheet strength provides confidence on the execution. Besides, a platform of choice for international brands aids confidence on new avenues (of growth).

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