In a recent market development, shares of Metro Brands, backed by Rekha Jhunjhunwala, witnessed a remarkable 12% surge, reaching a fresh 52-week high. The stock price hit Rs 1,293, and this impressive jump comes on the heels of a report by Prabhudas Lilladher, which issued an 'Accumulate' recommendation on September 28.
As of 2.30 pm, the shares were trading at Rs 1,248.8 on the NSE, marking a substantial 10.88% increase. Over the past six months, Metro Brands has demonstrated an impressive 53.29% growth, significantly outperforming the Nifty 50 index, which has grown by 11.26% during the same period.
Prabhudas Lilladher, in their coverage initiation of Metro Brands, rated the company as an 'accumulate.' They have set a target price of Rs 1,231 per share, based on an expected sales growth of 20.1% CAGR from FY23 to FY26. Furthermore, Metro Brands' strategic acquisitions of renowned brands like Crocs, FILA, Fitflop, and others have positioned the company for substantial growth in the foreseeable future.
In contrast, HDFC Securities, in their report, has maintained a 'Sell' rating on the footwear major, with a target price of Rs 840. They anticipate that normalizing KPIs (Key Performance Indicators) may exert pressure on margins from FY23 to FY26. Consequently, the current valuation of 59x Sep-25 P/E for a 15% EPS CAGR story over FY23-26 appears to be on the higher side, as per HDFC Securities' assessment on September 29.
Technical Insights and Shareholding Pattern
Metro Brands boasts a market capitalization of Rs 33,867.7 crore. The Relative Strength Index (RSI) stands at 62.1, suggesting that the stock is currently neither overbought nor oversold.
The one-year beta for Metro Brands is 0.55, indicating relatively low volatility in the stock. Notably, the shares of Metro Brands are trading above various moving averages, including the 5-, 10-, 20-, 50-, 100-, and 200-day moving averages.
On October 3, over 32 lakh shares of Metro Brands changed hands, significantly surpassing the 20-day average volume of 1.4 lakh equity shares.
In terms of shareholding, the promoter holds a substantial stake of 74.2% in the company as of June 2023. Late Rakesh Jhunjhunwala's wife, Rekha Jhunjhunwala, maintains a 9.6% stake in Metro Brands. Foreign Institutional Investors (FIIs) own a 2.6% stake, while Domestic Institutional Investors (DIIs) hold 5.7%. The public has a 17.5% shareholding in the company.