IGI Logo

Metro Brands Ltd.

About the Company

Incorporated in 1955, Metro Brands Ltd. (Metro) is one of the largest Indian footwear speciality retailers, and is among the aspirational Indian brands in the footwear category. It opened its first store under the Metro brand in Mumbai in 1955, and have since evolved into a one-stop-shop for all footwear needs, by retailing a wide range of branded products for the entire family including men, women, unisex and kids, and for every occasion including casual and formal events. Metro operates 598 Stores across 136 cities spread across 30 states and union territories in India. It retails footwear under its own brands - Metro, Mochi, Walkway, Da Vinchi and J. Fontini as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop, which complement its in-house brands. It also offers accessories such as belts, bags, socks, masks and wallets at its stores. It also retails foot care and shoe care products through a joint venture, M.V. Shoe Care Private Limited, making it a ‘one-stop-shop’ for all footwear and related accessories to its customers. It primarily follows the company-owned and company-operated (COCO) model of retailing through its multi-brand outlets (MBOs) and exclusive brand outlets (EBOs) to better manage customer experience. Its loyalty programs have given insights into customer preferences and trends over the years, further enabling it to tailor its product offerings to customers' preferences.

Objects of the Issue

* Expenditure for opening new stores of the company, under the “Metro”, “Mochi”, “Walkway” and “Crocs” brands

* General corporate purposes.

Valuation

The Indian footwear consumption in value terms is expected to grow at a CAGR of 15% to 17% between FY22-25. Growth is estimated to be driven by value, with average selling price of footwear expected to increase by a CAGR of around 5% to 7% between FY22-25, driven by an overall shift in preference for premium categories of footwear. This is also expected to drive the growth of the market share of organized players by a CAGR of approximately 20% to 22% in the same period. The market share of online footwear sales is also expected to grow at a CAGR of 26% to 30% between FY20-25.

Metro is well placed to benefit from positive industry growth trends given its strong presence, a wide range of brands and products which cater to all occasions across age groups and market segments. Moreover, strong promoter background, asset-light model, long-standing relationships with its vendors and presence across multiple formats (MBOs, EBOs and Online) are some of the key strengths of the company. In terms of financial performance, FY21 was impacted for the company due to the pandemic. Barring FY21, Metro has posted decent financials with healthy margins and returns profile. Going forward, Metro intends to expand its store network in existing as well as new cities in India. It also plans to leverage its multi-channel platform to pursue new business opportunities. It intends to increase contribution from the e-commerce channel and also look to expand its portfolio of accessories and grow other allied businesses. At the upper price band, the company is valued at ~158x post issue FY22 annualized EPS. We are positive on long term growth prospects however growth and earnings revival would remain a key monitorable.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.religareonline.com/disclaimer

SEBI Registration number is INZ000174330

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaime