Metro Brands gains 5% post Q3; brokerages stay positive on growth outlook

The buying on the counter came after Metro Brands reported healthy December quarter (Q3FY26) results on Wednesday, after market hours.

Metro Brands shares gained 5.3 per cent in trade on BSE, logging an intra-day high at ₹1,075.3 per share. At 9:47 AM, Metro Brands’ share price was trading 2.78 per cent higher at ₹1,049.1 per share. In comparison, BSE Sensex was down 0.58 per cent at 82,424.42.

 

The buying on the counter came after the company reported healthy December quarter (Q3FY26) results on Wednesday, after market hours.

Metro Brands Q3 results recap:

In Q3, the company reported a 35 per cent jump in its consolidated net profit to ₹128.35 crore, as compared to ₹94.58 crore a year ago. The company’s revenue was up 15.3 per cent to ₹811.27 crore in Q3FY26 on a year-on-year (Y-o-Y) basis, as compared to ₹703.09 crore in Q3FY25. Check detailed result here. 

Brokerages’ views on Metro Brands

Emkay Global Financial Services | Buy | Target cut to ₹1,300 from ₹1,375

Emkay said it has trimmed the target, factoring in lower other income, on payment of special dividend (₹400 crore). With goods and services tax (GST) reduction and an improving outlook for value-format Walkway, the brokerage expects growth to remain on an improving trend. 

 

Accelerated pace of store expansion provides added confidence (82 net additions in 9MFY26, against 59 in 9MFY25). Analysts also see scope for margin gains, helped by operating leverage on recent tech/team investments and a turnaround in FILA (150-250bps impact in FY24/25). 

 

They uphold their positive stance on the back of strong mid-teens growth prospects, bolstered by growth in the existing portfolio (Metro/Mochi/Walkway/Crocs), new scalable exclusive partnerships (FILA/Foot Locker/Clarks), and potential optionality with Metro emerging as a go-to partner for incoming global brands with its healthy balance sheet (40 per cent cash as at end-Q2FY26).  ALSO READ | Strong order visibility, rich valuations divide analysts on BEL post Q3

Motilal Oswal Financial Services | Buy | Target cut to ₹1,315 from ₹1,400

Motilal Oswal highlighted that Metro Brands' revenue growth has picked up since H2FY25, driven by rising traction in ecommerce and acceleration in store additions. While BIS-related challenges persist for the S&A category (Foot Locker, FILA), the company has increased its focus on the value category (Walkway), signed a strategic partnership (New Era, Clarks) and launched new sports performance format (MetroActiv), which should help it sustain double-digit growth over the medium term.

 

The brokerage remains positive on the company’s long-term outlook, given its superior store economics, with industry-leading store productivity and strong cost controls; strategic tie-ups with leading brands; and a long runway for growth in its coreformats, largely funded through internal accruals.

 

It has raised the FY26-28E Earnings before interest, tax, depreciation and amortisation (Ebitda) by 2-4 per cent, driven by slightly higher growth assumptions. However, the brokerage has cut FY26-28E profit after tax (PAT) estimate by 1-2 per cent primarily due to lower other income.

 

Given the strong runway for growth in the Metro, Mochi, and Walkway formats, along with significant growth opportunities in FILA/Foot Locker/Clarks, the brokerage builds in a compound annual growth rate (CAGR) of 15 per cent/16 per cent/13 per cent in revenue/Ebitda/PAT over FY25-28E.’  ALSO READ | Analysts raise TVS Motor target price as margins surprise, growth firms up

JM Financial Institutional Securities | Buy | Target cut to ₹1,370 from ₹1,385

Metro Brands delivered a strong Q3 print with 15 per cent Y-o-Y revenue growth, marking the third consecutive quarter of double-digit growth, despite a broader slowdown in discretionary consumption. Growth was volume-led, as average selling price (ASP) grew at 3 per cent Y-o-Y. 

 

Operational performance remained resilient, despite continued investments in new formats and marketing. Store expansion remained robust with 35 gross openings during the quarter. 

 

“We reduce our FY26-28 Pre-IndAS earnings per share (EPS) estimates by 4-6 per cent owing to the delay in portfolio ramp-up due to the ongoing BIS implementation challenge,” JM Financial said. 

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.