Metro Brands' target price raised at PL Capital citing GST tailwinds

PL Capital has raised its target price on Metro Brands to ₹1,302 per share from ₹1,135 earlier, which implies 2 per cent upside from Wednesday’s close at ₹1,276.25 per share. The brokerage retained ‘Hold’ rating on the stock as it believes the company is well-positioned to ride tailwinds post goods and services tax (GST) cut. Further, the brokerage has revised its FY26/FY27 earnings per share (EPS) estimates by 7.2 per cent/11.8 per cent on improved demand outlook.

Why did PL Capital raise its target on Metro Brands?

Demand trends and GST impact

Channel checks indicated that July–August demand remained steady, in line with H2FY25 run-rate, but September saw moderation as consumers deferred purchases ahead of the GST decision.

 

 

With GST on footwear priced between ₹1,000– ₹2,500 reduced from 12 per cent to 5 per cent, Metro Brands noted that about 40 per cent of its portfolio will benefit directly, with brands such as Metro, Mochi and Walkway seeing the greatest advantage. Footwear above ₹2,500, including Crocs and Fitflop, will not see a price change. The company is also considering repricing some SKUs in the ₹2,500–₹3,000 band to just under ₹2,500 (ex-GST) to maximise benefit and stimulate demand.

FILA India: product revamp underway

Having resolved legacy inventory challenges, FILA India is now focusing on brand repositioning and product revamp, targeting the premium athleisure segment. The company has established international and domestic design teams to sharpen collections in the ₹5,000–₹8,000 price band.

 

Metro Brands is also exploring Vietnam sourcing as certified manufacturers gain BIS approvals, which could diversify supply, improve costs and elevate quality. The brand plans to open three exclusive stores in FY26 as pilots, with a wider rollout in FY27 based on consumer response.

Clarks India: fastest turnaround

Clarks has emerged as the quickest turnaround brand in the company’s portfolio, driven by its premium comfort positioning and a shift to local sourcing, which has improved supply chain agility and margins. The first exclusive brand outlet (EBO) is scheduled for 1HFY27, enabling gradual direct-to-consumer expansion.

Foot Locker: early traction with long-term promise

Metro Brands has opened two Foot Locker India outlets and plans three more in Q2FY26. Larger than existing format stores, Foot Locker is already resonating with urban youth and sneaker enthusiasts. Management sees potential to open 50–100 stores over the medium-to-long term in Tier-1 and Tier-2 cities, delivering a projected 63 per cent revenue CAGR over FY26–28, with topline expected to cross ₹100 crore by FY28.

Outlook

Despite soft near-term demand due to delayed purchases, Metro Brands remains positive on its trajectory, supported by GST-led pricing benefits, growing contribution from premium international brands, and expansion into newer retail formats.