Metro Brands Limited — Q3 FY26 earnings call

Call held 28 Jan 2026

Management summary

Metro Brands delivered a strong Q3 FY26, defying broader discretionary consumption slowdowns with 15% top-line growth and industry-leading 33% EBITDA margins. The company successfully navigated the early festive season shift and benefited from a strong wedding season. Management remains committed to its long-term guidance of 15% CAGR and 15% PAT margins, supported by aggressive store expansion and the scaling of new formats like Foot Locker and MetroActiv.

Highlights

  • Consolidated Revenue crossed the ₹800 crore mark for the first time, reaching ₹811 crores with 15% YoY growth.

  • EBITDA margin remained robust at 33% for both standalone and consolidated businesses.

  • PAT grew by 33% YoY, achieving a 16% margin despite a ₹3.3 crore accrual for the new proposed Labour Code.

  • Digital commerce business grew 24% YoY, now contributing 12% to total revenues.

  • Premium products (priced above ₹3,000) maintained a high share of 55% of the total business.

  • Aggressive expansion continued with 35 new stores opened in Q3, bringing the fiscal year total to over 100 new stores.

  • Average Selling Price (ASP) grew by 2-3%, implying a healthy volume growth of approximately 12%.

  • Launched 3 new MetroActiv stores, a multi-brand athletic performance format featuring Nike, New Balance, and ASICS.

Key financials

  1. Revenue ₹811 Cr +15%YoY
  2. EBITDA Margin 33%
  3. PAT ₹130 Cr +33%YoY
  4. PAT Margin 16%
  5. Digital Commerce Share 12%
  6. Premium Product Share 55%

What they filed

Q1 FY27: revenue up 14.6%, net profit down 4.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue585 703 643 628 651 +11%811 +15%773 +20%720 +15%
EBITDA155 225 197 194 171 +10%265 +18%238 +21%215 +11%
Net profit72 95 95 99 69 −4%130 +37%118 +24%95 −4%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Revenue

  • Average CAGR Revenue · Medium to Long Term · High confidence 15%
    Rahul, on your first question on top line, on a medium- to long-term scale, we have always guided that our average CAGR should be around 15%.

    — Kaushal Parekh, CFO

Margin

  • Gross Margin Band Margin · Medium to Long Term · High confidence 55-58%
    Gross margins in that range of 55% to 58% is what we are comfortable with.

    — Kaushal Parekh, CFO

  • EBITDA Margin Margin · Medium to Long Term · High confidence 30%
    EBITDA in that 30% range and PAT in that 15% range is what we are guiding for medium to long term.

    — Kaushal Parekh, CFO

Other

  • Store Closures Other · Annual · Medium confidence 2-3%
    Broadly, every year, it would be in that range of around 2% to 3%, which is -- there is a basic cleanup that we keep doing every year.

    — Kaushal Parekh, CFO

  • Clarks Store Openings Other · Q3 FY27 · Medium confidence Q3 FY27
    our new Clarks partnership is off to a great start, and we plan on opening Clarks stores around Q3 of this coming fiscal year.

    — Nissan Joseph, CEO

Risks & concerns

  • BIS (Bureau of Indian Standards) Compliance

    medium

    Delays in BIS certification for global brands are slowing down the aggressive expansion of Foot Locker and impacting FILA's premium 'high-heat' inventory.

    Both acknowledged

  • New Format Gestation Drag

    low

    New ventures like Foot Locker and MetroActiv are currently in a gestation period, acting as a slight drag on overall EBITDA margins due to marketing and setup costs.

    Analyst acknowledged

  • Proposed Labour Code Accrual

    low

    A ₹3.3 crore accrual for the new proposed Labour Code dampened PAT in the current quarter.

    Management acknowledged

Areas of evasion (1)

  • Specific same-store sales growth (SSSG) numbers, which the company consistently chooses not to disclose.

Q&A highlights

3 direct
Growth Pickup vs. Flat Revenue per Square Foot Direct
10% of our chain is actually that was new came in below. So the fact that we are flat to last year is a sign that we're actually doing well in our existing doors to maintain and keep that cropped up.

Explains the mathematical dilution of new stores on aggregate metrics while confirming healthy same-store performance.

Asked by Devanshu Bansal, Emkay Global

GST Benefit Pass-through and Impact on Growth Direct
If GST was not there, we would have had gross sales that were 3% higher... the consumer is paying 11% lesser [on specific price points]... that adds up to 3% on a company-wide basis.

Clarifies that reported net revenue growth of 15% would have been ~18% at a gross level if not for the GST-linked price reductions passed to consumers.

Asked by Sameer Gupta, IIFL Capital

BIS Regulation Impact on Foot Locker and FILA Direct
It is only 20% of the sales, but it is a 20% of the high heat sales that create uniqueness... we've slowed the growth down until we have visibility.

Acknowledges a specific regulatory headwind affecting premium imports but quantifies it as a limited portion of the business.

Asked by Akhil Parekh, B&K Securities

2 min read 5 chapters

Detailed narrative

Defying Discretionary Slowdown

Metro Brands reported a 15% revenue growth, reaching ₹811 crores, which management highlighted as 'defying the trend' of a broader slowdown in discretionary consumption. This growth was driven by a strong wedding and festive season, with premium products (above ₹3,000) contributing 55% of the business. The company achieved this despite an early Puja season that shifted some demand into Q2.

Strategic Expansion and New Formats

The company opened 35 new stores this quarter, surpassing 100 new stores for the fiscal year. A key highlight was the launch of MetroActiv, a new multi-brand athletic format featuring brands like Nike and New Balance. While these new formats (including Foot Locker) are currently in a gestation phase and creating a slight margin drag, management views them as essential for long-term growth in the athletic and sneaker segments.

Margin Resilience and Guidance

EBITDA margins remained industry-leading at 33%, consistent with previous guidance. Management reiterated its long-term financial framework of 55-58% gross margins, 30% EBITDA margins, and 15% PAT margins. They emphasized that they are not 'capital starved' and will continue to open stores based on profitability rather than fixated numbers.

Navigating Regulatory and Accounting Headwinds

The quarter saw a ₹3.3 crore accrual for the proposed new Labour Code and ongoing challenges with BIS regulations affecting premium imports for Foot Locker and FILA. Management has adopted a 'measured' approach to Foot Locker expansion until there is more visibility on BIS compliance, though they clarified that this only impacts approximately 20% of the sales mix (the 'high-heat' products).

Digital and Omni-channel Momentum

Digital commerce grew by 24% YoY and now accounts for 12% of total revenue. Management clarified that while they use e-commerce as a liquidation channel, they are focused on maintaining profitability in this segment and will not chase growth through excessive discounting that could hurt brand value.

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