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:

• Revenue: ₹642.8 crore, up 10.3% YoY, in line with expectations.

• Gross Margins: 57.5%, expanding by 105 bps YoY — a healthy sign of cost discipline and premium positioning.

• 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:

• 27.0% in FY26E

• 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:

• Sales per square foot declined 1% YoY to ₹4,750, indicating some softness in store productivity.

• The company has withdrawn its store opening guidance, adding a layer of uncertainty for near-term expansion.

• BIS continues to impact the supply chain, potentially weighing on future margin or revenue growth.

Key Numbers at a Glance

Final Verdict: Strong Brand, But Valuations Weigh

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:

• Full Research Report
• Kotak Securities Research Disclaimer
• Research Hub