Metro Brands Share price: Shares of footwear company Metro Brands were seen jumping by more than 2.5 percent today on January 1. Actually, this rise in the stock is due to the bullish view of brokerage firm Motilal Oswal on this stock. He says that there are challenges in the short term but there is a positive outlook on the stock in the long term. Motilal Oswal has given Buy rating to the stock and has given a target of Rs 1460 for it.
The brokerage house says it has given flat returns in CY24. The stock has given lower returns than the benchmark index. There is possible pressure on gross margins due to liquidation of FILA inventory. Income per square foot has fallen due to low share of Crocs. BIS certification challenges may delay FILA’s expansion.
The brokerage firm has said in its research report that although there are challenges in the short term, there remains a positive outlook on the stock in the long term. Using its funds for growth will be positive for the company. Execution and low cost store will lead to 30%+ RoIC, which is a strong position.
Internal reasons for poor performance
The stock’s weak performance has its own internal reasons. FILA’s old inventory got liquidated. This has affected the gross margin of the company. Income per square foot declined. CROCS’s share in incremental stores declined.
External reasons for poor performance
At the same time, challenges remain regarding the implementation of BIS. This delayed FILA’s expansion. FILA and Foot Locker ramp-up delayed. The demand for footwear is declining.
How is the stock’s performance?
Around 2.15 pm, the stock is trading around Rs 1248 on NSE with a gain of Rs 31.80 or 2.60 per cent and with today’s rise, the market cap of the company reached Rs 33,967 crore. The day high of the stock is at Rs 1,259.95 while the day low is at Rs 1,201.75. Whereas 52 week high is at Rs 1,430.00 while 52 week low is at Rs 990.05. The stock has shown a gain of more than 1 percent in 1 week.
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