Metro Brands Q1 Results Review - Revenue Pressure Accentuated Due To Seasonality: ICICI Securities

ICICI Securities Report

Metro Brands Ltd. Q1 FY25 revenue growth continues to be underwhelming at -1% YoY, as lower number of wedding days further accentuated footfalls concerns which the industry was already witnessing.

Retail expansion was healthy at 11% YoY and is on track to open 100 stores in FY25 (225 stores in FY25-26). Management expects revenue growth to be ~12-15% in FY25 (lower than its long-term guidance of 14-18% compound annual growth rate) while maintaining its profitability guidance.

Operating profit margin remains healthy driven by cost focus and lower losses for Cravatex brands. Liquidation of inventory for FILA will be completed by Q2 FY25. Metro continues to be the choice of platform for global brands to enter India; signed long-term exclusive distribution agreement with New Era.

Increasing management bandwidth (new COO) addresses concerns around managing increasing complexity. Higher number of wedding days (21% YoY) for rest of FY25 keeps us optimistic.

Maintain 'Add'.

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