Metro Brands - It Is A Timing Headwind, Not Economic: ICICI Securities

ICICI Securities Report

We met with the management of Metro Brands Ltd. Takeaways:

1. Moderate performance in H1 FY24 was due to a high base and a shift in festivals to Q3 FY24; underlying demand trend remains intact.

2. Competition has kicked off end of season sale early in December 2023 due to inventory stress (in our opinion); Metro, as usual, has not participated.

3. Premium price point (greater then Rs 3000) continues to outperform.

4. Focus is on omni channel to improve customer engagement / experience. Brand.com business is expected to grow at a higher clip versus other online channels.

5. BIS may be implemented by January 2024. However, due to absence of full clarity, inventory front loading (to mitigate supply chain disruptions) may create some volatility in the near term.

6. Cravatex brands’ integration is tracking as per plans (to breakeven by Q4 FY25-Q1 FY26).

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