Metro Brands has been given a "Hold" rating by Prabhudas Lilladher, with a target price of Rs 1208. The firm has adjusted its earnings per share (EPS) estimates for FY25, FY26, and FY27 downwards by 3.1%, 4.6%, and 5.1% respectively.

This is due to weaker-than-expected revenue and earnings caused by sluggish demand and margin pressures from selling FILA inventory at significant discounts. Furthermore, revenue guidance for FY25 has been revised from 12-15% to 10-15% due to issues with high-end international brand imports.

Despite these challenges, Metro Brands is making progress with its operational strategies. This includes expanding into three new cities in the second quarter and increasing online and omnichannel sales, which now make up approximately 11.4% of total sales. The company is also experiencing growth in sales priced above Rs 3000, which has increased by three percentage points year-on-year to around 53%. The long-term growth strategy remains focused on geographical and store expansion. Metro Brands plans to open 225 stores over the next two years and acquire brand licenses, including Crocs and Birkenstock. However, the current valuation at 62.7x FY27 earnings suggests limited potential for near-term growth due to ongoing market volatility.