Metro Brands Q4FY25: Growth Persists, But Valuations Curb the Runway
Metro Brands delivered a decent Q4FY25, with revenue growth and margin improvement continuing from the previous quarter. However, elevated valuations and some execution challenges have prompted a more cautious view.
Highlights from Q4FY25
Let’s unpack the numbers:
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Revenue: ₹642.8 crore, up 10.3% YoY, in line with expectations.
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Gross Margins: 57.5%, expanding by 105 bps YoY — a healthy sign of cost discipline and premium positioning.
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Sales growth momentum from Q3 carried through into Q4, reflecting consistent consumer demand.
Management’s Perspective & Outlook
Metro Brands continues to see opportunities in e-commerce and premium channels, with earnings projected to grow:
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27.0% in FY26E
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21.5% in FY27E
However, with the stock trading at 60.6x P/E FY27E earnings, the valuation leaves limited room for error, hence the downgrade to SELL.
Challenges to Watch
Despite the positives, a few headwinds remain:
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Sales per square foot declined 1% YoY to ₹4,750, indicating some softness in store productivity.
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The company has withdrawn its store opening guidance, adding a layer of uncertainty for near-term expansion.
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BIS continues to impact the supply chain, potentially weighing on future margin or revenue growth.
Key Numbers at a Glance
| Metric | Q4FY25 Highlights |
|---|---|
Revenue | ₹642.8 crore (+10.3% YoY) |
Gross Margin | 57.5% (+105 bps YoY, KIE: 55.5%) |
Sales per sq. ft. | ₹4,750 (↓1% YoY) |
FY26E Earnings Growth | +27.0% expected |
FY27E Earnings Growth | +21.5% expected |
P/E (FY27E EPS) | 60.6x |
Revised Fair Value | ₹1,100 |
Metro Brands is still showing healthy topline growth and margin gains. But at current valuations, and with store expansion paused and BIS concerns in play, the near-term risk-reward skews cautious. We’re shifting to a SELL view — but long-term execution will remain key to watch.
Disclaimer & Full Report
This feature is based on a synopsis of a research report issued by Kotak Securities Limited. For the full story (and disclaimers), make sure to check out the original sources:
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