Rekha Jhunjhunwala's Rs 4,700 crore stock bet gets share price target revisions

A Rekha Jhunjhunwala's Rs 4,700 crore stock bet has received positive views from share analysts following the company's margin-led Q4 beat. Stock analysts have upped their target prices on this stock by up to 10 per cent, as e-commerce channel, better mix, and curtailed FILA loss drove the Q4 beat, leading to price target upgrades. This is Metro Brands.

Rekha Jhunjhunwala owned 14.37 per cent stake in this company at the end of March quarter, which at Friday's closing price of Rs 1,209.75 was worth Rs 4,732 crore. 

Emkay Global has retained its 'Buy' on Metro Brands, while raising its target by 8 per cent to Rs 1,400 from Rs 1,300 earlier, on rollover to June 2027 EPS estimates. 

"Q4 Ebitda came in 8-12 per cent ahead of our estimate, led by 230-360bps better margin as Q4 revenue growth of 10 per cent was in line with estimate. Apart from disruptions due to geo-political tension, the management commentary indicated return of normalcy in consumption behavior with Metro maintaining its medium-term outlook of 15 per cent topline CAGR," Emkay Global said. 

MOFSL said Metro Brands' Q4 results were above its estimates, driven by 10 per cent YoY revenue growth, 105 bps gross margin expansion and superior cost controls. 

"Concerns around Fila's liquidation and BIS-related challenges are now well behind the company, and MBL focus is on ramping up FILA and Foot Locker. We remain positive about MBL’s long-term outlook, given a) its superior store economics, with industry-leading store productivity and strong cost controls, and b) a long runway for growth, largely funded through internal accruals, backed by a strong balance sheet and a healthy RoIC of ~30%+," MOFSL said.

This brokerage suggested a target of Rs 1,400 per share on the stock. 

Nuvama suggested a revised target of Rs 1,216 against Rs 1,184 earlier. It retained ‘Hold’ on the stock.

"Sales psf at Metro stores are still trending down, but decelerating. Inventory levels have normalised over the past year as the market adjusted after the BIS regulations took effect. The planned expansions for Footlocker and FILA are contingent on easing of supply chain issues, which management expects to occur over 9–12 months," it said.

JM Financial said Metro Brands' Q4 revenue was in line with its expectations, adding that a better margins drive the PAT beat.

"While Metro gave a positive commentary on expansion, it refrained from providing a specific store-count target for FY26 which is a divergence from its previous calls, and a tad negative. However, better margin delivery is completely offsetting the slight reduction in our topline assumptions on temporary disruption and likely lower store additions," Emkay Global said.