Shares of footwear company Metro Brands, backed by ace investor Rakesh Jhunjhunwala, surged 20 per cent to Rs 608.20 on the BSE in Monday’s intra-day trade after the company reported strong earnings for the quarter ended December 2021 (Q3FY22).
The stock is trading at its highest level since it got listed on December 22, 2021. With today’s surge, it has gained 22 per cent against its issue price of Rs 500 per share.
At 10:05 am, Metro Brands was trading 18 per cent higher at Rs 600, as compared to a 0.09 per cent gain in the S&P BSE Sensex. The trading volumes on the counter jumped an over five-fold with a combined 2.7 million equity shares having changed hands on the NSE and BSE.
Rakesh Jhunjhunwala’s wife Rekha Jhunjhunwala held 14.42 per cent stake in Metro Brands as on December 21, 2021, the shareholding pattern data showed.
For Q3FY22, Metro Brands reported 53.2 per cent year on year (YoY) growth in consolidated net profit at Rs 102 crore, on healthy revenue growth. The company’s total revenue from operations grew 59 per cent YoY to Rs 484 crore.
Earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 220 bps to 34.9 per cent in Q3FY22 as compared to 32.7 per cent in Q3FY21. The strong gross margins were achieved due to lower contribution of discount sales and improvement in overall sales mix. In the coming quarters, overall gross margins are expected to normalize back to around 55-56 per cent levels. (average seen over last few years).
Q3FY22 was the first quarter post March 2020 without any major Covid related restriction. Robust recovery in customer sentiments witnessed since August 2021 continued in Q3FY22, helping the company register its best ever quarterly sales.
The store expansion also gathered pace with 39 new stores opening in Q3 FY22 - highest ever new store openings per quarter till date. The growth momentum in e-commerce sales (including omni-channel sales) continues with 69 per cent growth (Q3 FY22 vs Q3 FY21), the company said.
The company does not expect major impact due to the GST rate revision for footwear priced below Rs 1000 as less than 15 per cent of range is below Rs 1,000. The new rate of 12 per cent from earlier 5 per cent has been effective starting January 1, 2022.
Metro Brands is one of the largest Indian footwear speciality retailers. It has evolved in a one-stop shop for all footwear needs by retailing wide range of branded products for the entire family and for every occasion including casual and formal events.
The company retails footwear under its own brands Metro, Mochi, Walkway, Da Vinchi and J. Fontini, and certain third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop. The company also offers accessories such as belts, bags, socks, masks, and wallets. And has retail foot care and shoe-care products at its stores through a joint venture, MV Shoe Care.