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Metro posted total revenues of Rs 489.27 crore for H1FY22 and PAT of Rs 43.10 crore during the same period. The total revenues for FY21 reduced by 33%, to Rs 878.54 crore from Rs 1311.07 crore in FY20 due to the pandemic effect on the operations due to lockdowns. The Issuer posted PAT of Rs 65.22 crore for FY21 against Rs 159.73 crore in FY20.
The revenues increased by 6% in FY20 to Rs 1311.07 crore from Rs 1236.89 crore in FY19. The profitability margins have been strong throughout all the three fiscals as can be seen in the table.
Debt to equity is 0.74x as at the end of H1FY22. Return on net worth is 5.13%, 7.88%, 19.79% and 23.27% in H1FY22, FY21, FY20, FY19 respectively.
Title | H1FY22 | FY2021 | FY2020 | FY2019 |
Total revenue | 489.27 | 878.54 | 1311.07 | 1236.89 |
Operating profit | -661.66 | -1071.21 | 360.78 | 164.72 |
Profit after tax | 43.1 | 65.22 | 159.73 | 151.2 |
EBITDA | 144.72 | 250.01 | 378.58 | 355.63 |
Total Assets | 1739.61 | 1659.34 | 1617.42 | 1321.51 |
Cash generated from operations | 52.02 | 285.64 | 333.91 | 276.00 |
EBITDA margin | 29.58% | 28.46% | 28.88% | 28.75% |
Net margin | 8.81% | 7.42% | 12.18% | 12.22% |
The Issue is priced at 154.32x with annualized EPS of 3.24 as at the end of H1FY22 calculated at the upper price band of Rs 500 per share. The sector P/E is 108.60 which indicates a fully priced issue. P/BV is 15.80x at NAV of Rs 31.64 as of the end of H1FY22. Bata and Relaxo are the listed peers of the Issuer as per the RHP. Other peers are Khadim (listed), Liberty (listed), Mirza International Ltd. (listed), and Paragon.
Particulars | Bata | Relaxo | Metro |
Face value per share | 5 | 5 | 5 |
Total Income for FY 21 (Cr) | 1,802.57 | 2,381.92 | 878.54 |
Net profit margin (FY21) | -5% | 12.30% | 7.42% |
EPS (As on 9 Dec 21) | 1.84 | 11.73 | 2.43 |
NAV per share | 136.79 | 63.29 | 31.17 |
Return on net worth | -5.08% | 18.54% | 7.88% |
P/E (As on 9 Dec 21) | NA | 110.82 | NA |
P/B (As on 9 Dec 21) | 14.52 | 20.58 | NA |
Market price (As on 9 Dec 21) | 1980 | 1313 | NA |
No. of retail stores | 1526 | 398 | 586 |
Metro Brands Limited IPO opens on 10th Dec 2021 with an issue size of Rs 1367 crore (fresh issue Rs 295 crore). The price band of the IPO is Rs 485-500 per share. The retail quota is 35% and the minimum subscription amount is Rs 15000. The IPO closes on 14th Dec and is expected to list on 26th Dec. Proceeds of the IPO would be used to open new stores (Rs 225.37 crore).
The footwear market in India is fragmented, with organized players having a lower share as compared with unorganized players. The organized industry contributes to approximately 35% of the total footwear industry. This organized 35% of the industry is valued at Rs 229 billion in FY21. (Rs 294 billion in FY20) consists of players such as Bata India, Metro Brands, Mirza International, Paragon, Relaxo, Inc 5. Action footwear, and International brands such as Reebok, Nike, Puma, and others.
Metro Brands Limited is one of the largest Indian footwear specialty retailers present in India. The Issuer has a reasonable financial performance. The factors of concern are the presence of competition from both the unorganized and organized players and international brands as well. With the presence of so many players in the organized Indian footwear market, there is a need among brands to innovate and stay ahead of fashion. The sector would grow with growing urbanization in India but the rate of growth may be slower. Hence considering all these factors, one may apply for the long term.
Review By CA Priyanka Choudhary on 3rd Dec 2021
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.