Metro Brands EPS Cut for FY27–28 Amid Higher Costs; DCF-Based TP Revised to ₹1,276, Retain ‘HOLD’

Metro Brands Ltd (MBL) has seen its FY27/FY28 EPS estimates cut by 4.3% and 4.9%, respectively, due to higher overheads from accelerated store additions across formats and increased advertising and promotion (A&P) spending to nurture new brands. Analysts expect operating performance to improve gradually, supported by: Expansion into Tier-2 and Tier-3 cities through formats such as Metro, Mochi, and Walkway. Normalization of BIS-related issues by end-FY26, enabling faster growth in Foot Locker and FILA. Launch of Clarks exclusive brand outlets (EBOs) in FY27. MBL’s growth strategy remains on track, driven by: Entry into new cities and healthy omni-channel momentum, with online sales forming ~14.2% of revenue (up 39% YoY). A 100 bps rise in the share of products priced above ₹3,000, now forming ~54% of total sales. Rapid rollout of Walkway stores (10 added in Q2FY26) targeting value-conscious Tier-2 consumers and strengthening MBL’s position as a comprehensive footwear destination. The company is also expected to benefit from GST 2.0 implementation and upcoming wedding season demand, with key growth drivers emerging from Clarks, FILA, and Foot Locker brands. Analysts project a 16.6% EPS CAGR over FY25–FY28, assigning a DCF-based target price of ₹1,276 (down from ₹1,302 earlier). Given rich valuations at 58.6x FY28 EPS, the rating is retained at ‘HOLD’. #MetroBrands #FootwearSector #EarningsUpdate #RetailExpansion #FILA #FootLocker #Clarks #OmniChannel #StockMarketIndia #HoldRating #ConsumerDiscretionary