Metro Brands - marketing footwear


Metro Brands Limited is one of the largest Indian footwear speciality retailers in India. The company opened its first store under the Metro brand in Mumbai in 1955, and have since evolved into a one-stop shop for all footwear needs. The company retails a wide range of branded products for the entire family including men, women, unisex and kids, and for every occasion including casual and formal events. As of December 31st, 2021, the Company operated 629 Stores across 140 cities spread across 30 states and union territories in India.

Metro is one of the few retailers among the footwear players to source all its products through outsourcing arrangements, thus having an asset light model with no manufacturing / production facility. In FY21, the company had 250 vendors for procurement of all their products including key brands such as Metro, Mochi & Walkaway. It is the fourth largest footwear player in terms of revenues with an operating income of Rs. 800 crores in Fiscal 2021. In FY21, it enjoyed the highest operating margins and second highest net margin of 22.1% and 8.1% respectively among peers. It also had the highest gross and net margins from Fiscal 2015 to Fiscal 2020 among the footwear sector.

The company retails footwear under its own brands of Metro, Mochi, Walkway, Da Vinchi and J. Fontini, as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop. The company also offers accessories such as belts, bags, socks, masks and wallets etc. It also retails footcare and shoe-care products through a joint venture, M.V. Shoe Care Private Limited, thus becoming a ‘one-stop-shop’ for all footwear and related accessories to our customers.

As of September 30, 2021, the company retailed products of over 25 brands. Given below is the list of some key brands including the typical price range:

Almost 30% of their revenue comes from sale of third-party brands.

Industry Overview

The Indian footwear industry has witnessed increased activity over the last few years, with the changing consumer attitude towards footwear. Shoes, initially positioned as a value purchase, are now transcending into a lifestyle purchase. Like the apparel segment, the footwear segment is characterised by fashion designs and trends, high margins and presence of private labels. CRISIL Research expects growth momentum to pick up growing at a CAGR of approximately 21% between Fiscal 2021 and 2025.

Globally, India is ranked second among footwear-producing countries in terms of unit pairs, China being first. China, India, USA, Indonesia, Brazil, Japan, Pakistan, Germany, France, UK and Italy are some of the major footwear-producing nations worldwide. China has largest production capacity and accounts for more than half of the world’s footwear production. According to industry associations, global footwear production is estimated at 24.3 billion pairs as of 2019. Global average per capita annual consumption is approximately 3.2 pairs as of 2019. India’s per capita annual consumption is very low, compared to its peers, at approximately 1.9 pairs.

The Indian footwear industry remains largely unorganised, with approximately 69.4% share of the total footwear industry as of Fiscal 2020. CRISIL Research estimates the share of organised players at approximately 30.6% as of Fiscal 2020, translating to a market size of Rs. 294 billion. The organised players’ share has grown at CAGR of approximately 15% in past 5 years, largely on account of rise in urbanisation levels and increasing acceptance of brands and modern retail formats by the Indian consumer.

Region-wise break-up of footwear market in India (as of fiscal 2020) is shown below:


The primary growth drivers for the footwear industry in the country include the rise of footwear as fashion wear, health & fitness awareness, rise of women in the workforce, rise in disposable incomes leading to consumers moving up the higher price points or more footwear pairs, rise in urbanisation and the movement from unorganised to organised sector.

Metro Brands - Operations

As of 31st December 2021, the company operated 629 stores across 140 cities.

Zone-wise, tier-wise and location-wise distribution of its stores are given below:

Brand-wise distribution of stores for some of the key brands along with their price points realizations is given below:

In January 2022, the company has also announced an exclusive tie up with Fitflop for marketing their products. Based out of the United Kingdom, Fitflop is known for its premium super comfortable flip-flops and other footwear. With this agreement, Metro gets exclusive rights for sale and distribution of Fitflop products across all formats including EBO, MBO, airport outlets, online marketplaces etc.

Besides the physical stores, company also sells through tie-ups with online retailers and marketplaces. As on 31st December 2021, 9.2% of the revenues came from online channels. Between FY19 & FY21, online sales have increased at a CAGR of 73%.

The company operated two warehouses, both located at Bhiwandi in Maharashtra, on a leave-and-license basis.

As of September 30, 2021, the company had 2,622 permanent employees.

The company has one subsidiary, being Metmill Footwear Private Limited (51% shareholding) and one Joint Venture, being M.V. Shoe Care Private Limited (49% shareholding). Metmill operates shop-in-shops (SIS) in major departmental stores in the country and distributes Metro & other major international brands. M.V.Shoe Care retails foot care and shoe care products under the brand “PRO”.


Some of the prominent players in the Indian footwear market includes Bata, Khadim, Liberty, Metro, Paragon, Relaxo and Mirza International.

Product presence of competition is given below:

Metro operates at the premium end of the market with higher average selling prices compared to its peers:

Growth of online channels poses a significant threat to the established players, including Metro who have invested in building a significant offline presence.


The company was promoted by Mr. Rafique A. Malik, who now has over 50 years of experience in the footwear retail business. He is presently the Chairman of the company and provides strategic insights and overall direction to the business. Besides Mr. Rafique, other members of the family such as daughters Ms. Farah Malik Bhanji and Ms. Alisha Rafique Malik are also closely involved in running the business.

Presently, Nissan Joseph is the CEO of the company since 1st July 2021. He holds an MBA from Sydney and has worked with various companies in the footwear & retail industries in India and abroad.

Big Bull Rakesh Jhunjhunwala has been one of the early investors (not a promoter) in the company, having invested in it since 2007. Utpal Sheth, a close associate of Mr. Jhunjhunwala is a Nominee Director on the Metro Board. Other directors include Mr. Vikas Khemani of Carnelian and Srikanth Velamakanni of Fractal Analytics.


Brief financials of the company before its listing are given below:

IPO & thereafter

The company came out with an IPO of 2.735 crore equity shares at the rate of Rs.500 each raising Rs.1367 crores, which included an Offer for Sale by existing shareholders of 2.145 crore shares and a fresh issue of 59 lac equity shares aggregating to Rs.295 crores.

The issue proceeds will be primarily used to increase the offline presence of the company, as per the details given below:

The stock was listed on the stock exchange on 22nd December 2021 at Rs.437 per share and closed at Rs.605 per share on 31st Jan 2021. Post-IPO, the promoters now hold 74.27% of the share capital of the company. Rakesh Jhunjhunwala continues to hold more than 14% (not a promoter) of the post-issue capital.

For Q3 FY22, the company declared strong results with revenue up 59% YoY, EBIDTA up 70% YoY and PAT up 53% YoY. Company said this was the first major quarter after a long time when there were no covid related restrictions. 39 new stores were opened – the highest even in a quarter.

Useful Links:
Company Website
Red Herring Prospectus
Investor Presentation (Q3 FY22)
Analyst Concall (Q3 FY22)

(Disclosure: No exposure at present)


Is the valuation reasonable?

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On the basis of forward p/e and being a consumer facing brand and also acting as a platform business along with asset light model…

Valuation looks quite reasonable…:ok_hand::ok_hand:

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How to calculate forward P/E? It would be extremely helpful if you could provide an example for the metro…

You’ll find every answer in this detailed video


A very detailed report on Metro brands from ICICI securities published in June:-

Disc:- Tracking, no position.

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Interview with Mr. Nissan Joseph, CEO of Metro Brands

Vision To Be India’s Largest Footwear Speciality Retailer | Nissan Joseph, Metro Brands (

Commenting on the performance of the company Mr. Nissan Joseph, CEO , Metro Brands Limited, said :

We are pleased with our performance for Q2 2022 as we delivered topline growth of 47% over last year along with a consistent flow through to our EBITDA and PAT. We opened a total of 37 stores in the quarter which includes 4 relocated stores and 5 closed stores putting us well on pace to open the 260 stores we committed to opening in the next 3 years.
Additionally, we are very excited about the acquisition of Cravatex Brands Ltd. which fits with our strategic vision of expanding in the sports and athleisure space with exclusive rights to distribute FILA in the Indian sub-continent and ownership of the Proline Brand. These further advances us to our vision of being India’s largest specialty footwear and accessories retailer. “


Since noone has posted regarding ECCO’S and Metro tie up even after 15-20 days of news got publicly announced.
So, I have decided to put it on this forum
METRO has recently made a tie up with ECCO’s footwear for retail expansion in India ECCO’s which is a Denmark-based brand that manufactures and retails premium leather shoes and accessories across 101 countries.

Metro Brands will retail ECCO’s formal collection for both men and women in strategically selected Metro and Mochi stores located across India. ECCO footwear will also be accessible to consumers in India through the Metro and Mochi websites.

Some details which I gathered about ECCO’S from Myntra website
Price range - 5000-15000 so, it will be a higher ASP third party brand will target a premium segment.
Categories - Casual, sports, formal shoes, heels, boots, flats will cater to both women’s and men’s.

Metro has announced this on their LinkedIn profile and I got to know this from one website. Suprised to see they have not inform to exchanges. Maybe I missed this announcement please correct me if I am wrong


Some pictures of ECCO’s brands products gathered from Myntra since limited products are available on metro website.
Will update this Q2 performance after Concall.


Metro Brand Concall snippets:

  • GM in the range of 55-57% due to RM cost and end of season sale

  • Growth from > 3000 above category is high pent-up party is not over yet from premium consumer-Nissan Joseph in Q2FY23 Concall

  • E- commerce grew by 50% YOY in H1FY23

  • Total stores 37 net addition in H1FY23

  • Anticipating healthy demand due to wedding season

  • Cravatex acquisition for S&A will fuel growth in S&A

  • Revenue contribution-Q1-25%, Q2-22-23%, Q3-27-28%,Q4-25%

  • GM impacted due to end of season sale Q2, EOSS has impact on Q2 and Q4 only

  • Pre-covid H1FY20 Sale 60% and Q2FY20 Sale 70% (Standalone)

  • Try to open crocs shops before monsoon season as it happened this quarter too

  • Other expenses high bcoz of salary hike to retain talent and due to FILA Acquisition also

  • Marketing cost is back from last few months (check Instagram page of MBL and Crocs they have partnered with ranvijay and varun sood famous personalities of Roadies and with diljit dosanjh also)

  • Pent Up demand was not there in all segment( You can’t buy 3 shoes bcoz you have not brought in last 3 years- CEO Nissan Joseph) real demand is more now

  • Fila is under penetrated high opportunity in athleisure. In sept 2012 there is one news that Fila had extended local licence with Cravatex for 30 years and again same news to add 60 stores which has not done till yet hence MG is not walking the talk

  • ASP increase 5-7% due to inflation, We’re not a player of lower segment so can’t say for GST impact but we intend to become affordable premium player

  • 260 Stores by FY25 but fluctuation may come in this store count. Probably more stores will add in this as it doesn’t include FILA, Ecco’s. FILA store has more opportunity

  • Good opportunity in athletic apparel and athleisure but now don’t want to combine their operation with metro, mochi or walkway stores. This market is even more bigger than footwear market MBL is assembling the team for this market

  • FILA has net 20-30 EBO’s(Franchise) but MBL wants to rationalize them into the COCO Model. FILA is more hanging fruit type opportunity and they are evaluating more oppo like this

  • 200Cr spent for Cravatex acquisition which includes all brands but for a revenue of 150 crore as FY22 out of which distribution is in the ratio of 50:50 or 60:40 more or less. FILA operation will start from internal accruals only

  • Filtflop is seeing good growth in EBO and metro and mochi stores.

  • Discounted sale contribution in Q2 is 8% and H1 is up 5%

  • No plan to launch own brand in S&A

  • FILA Average selling price probably in around 3000-5000

  • Cravatex acquisition is for all brand but now they have decided for FILA and Proline operation

  • Licensing fees for FILA is market competitive


Metro Brands will open 260 stores over the next three years. Price increases owing to the rise in input costs as well as a better product mix boosted top-line growth in this quarter. The company is ramping up online sales too. They have a debt-free balance sheet & great return ratios as well.


Recently wrote a blog covering in depth research of metro brand, will appreciate your feedback.


Metro Brands Q2 FY23 Result Update:

  • Opened 46 new stores in H1 FY23. Should go up to 80-100 for the full year.
  • Q3 demand is meeting expectations. Little pent up demand of covid is still there but it is quite consistent during the wedding season.
  • There is good demand seen for the premium brands which cost more than Rs. 3000. Customers are willing to pay more and it is doing well.
  • Fila has been acquired. (Sportswear Brand). Will be planning as per what peers are doing.
  • EBITDA margin guidance of 30-31%. PAT would be around 15%. Gross Margins to remain between 55-57%.
  • Highest ever Quarterly E-commerce selling. Grew 50% YOY.
  • Target of opening total 260 stores until FY25 out of which 48 have been opened in H1 FY23.
  • Planning to expand e-commerce business.
  • Continuous surge seen in volumes and value across all formats and tiers.
  • Q1 is generally 25% of the full year revenue. Q2 is 22-23% of the revenue. Q3 is the biggest quarter which 27-28% of the revenue and Q4 is again 25%.
  • Gross margins in Q2 & Q4 get affected due to end of season sales.
  • Stores for crocs are usually opened before monsoon season as that is biggest for Crocs.
  • Costs are a little high this quarter due to salary costs of new stores which will start showing full revenue from Q3 onwards so the salary costs would be absorbed by the revenue. Costs have also increased due to acquisition.
  • Price increases are of about 5-7% every year to cover inflation costs and the basket of goods that you’re selling.
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Foot Locker, one of the biggest footwear retailers in the world, explored partnership with other retailers, too, for its India entry, but a deal with Metro Brands – itself a specialised footwear retailer – looks more likely, they said.
“The partnership could be either a franchisee agreement or a joint venture,” one of the officials said.


Nike, Adidas to be manufactured in India

Nike, Adidas shoe-maker has a Rs 2,000 crore plan to set up shop in India - The Economic Times (


WhatsApp Image 2023-06-10 at 13.44.22

  • Cravatex Brands has made a loss in Q4FY23 which has impacted Margins. This remains a concern for FY24. Likely to contribute 3% to revenue in FY24. CBL’s key priorities in CY24: integration, inventory liquidation, and improved store throughput: Key priorities for Cravatex Brands Limited (CBL) during CY24 shall include; (i) integration with MBL existing eco-system to leverage cost and operating leverage synergies, (ii) liquidation of current excess inventory and cash conversion cycle and (iii) improve store-throughput at existing outlets (currently CBL has 25 FILA EBOs).
  • The management revised its store opening guidance upwards to 315 over FY22–25E (115 stores opened in FY23) from 260. It is planning to open 100 stores each (from 80 earlier) in FY24/FY25.
  • The company has been on a path of rationalizing its distribution channels, including closure of the Fila stores that are currently operational. Going forward, once they re-position the brand, they would further invest in its new outlets.
  • The management expects to achieve its guided gross margins of ~55%-57%, in the upcoming quarters.
  • Going ahead, they anticipate certain moderation in its sales growth. In terms of profitability, they would adhere to their EBITDA and PAT guidance of ~30%-33% and ~15%-17%, respectively.
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I was reviewing my small holding in Metro Brands.

Metro posted 14.68 % growth in sales in the June quarter, lower than past quarters but better than most other peers. For example, Relaxo grew 11 %, Bata 2 %, Campus 5 %. I think 14 - 15 % is what its natural long run organic growth rate should be, though market growth estimates appear to be much higher. Gross margins have remained close to 58 - 60 % range in recent times. Operating margins around 30 %. Excluding Cravatex, operating margin was almost 35 % in the latest quarter. This is where Metro’s efficient outsourcing model makes a difference. Peers like Campus, Relaxo and Bata have margins in the range of 15 to 20 % but not higher. Metro’s return ratios like ROE & ROCE also continue to look good, in the 25 % range. Balance Sheet remains debt free, other than lease liabilities. Promoter salary is reasonable, at around half a percent of sales. Dividend payouts are in the range of 25 to 30% of PAT.

In FY23, store addition was the highest, and the pace has continued in Q1 FY24 as well with 27 stores added for the 3 months. This will support sales growth going ahead. Average sales per store is now more than Rs.3 crore per store, its highest on record.

The main operating cost in retail businesses is inventories. Not only inventories can be high, one does not know what they are really worth. But Metro has controlled inventories well. I understand for most of the Third-Party brands, Metro pays for the products only when they are sold, inventories are not on Metro’s account. This is such a good thing, given Third Party brands constitute a quarter of the company’s sales. New BIS Norms coming into play from 1st Jan 2024 will increase inventories, the company has said. Need to see how much this goes to.

Last year, June sales were around 25 % of the full year sales. If the same ratio holds for this year as well, the company will post a full year sales of Rs.2400 core for FY24. This is excluding new additions such as Fila. Overall, Metro leaves little to complain other than valuation. The stock has always been expensive and has become even more so in the last one year.

So there is a lot riding on Fila, clearly. The Cravatex acquisition cost Rs.200 crore, consuming a large part of the Rs.300 crore raised through the IPO. The biggest brands in this space are Adidas, Reebok and Puma. As per reports, Adidas and Puma have been selling more than a Rs.1,000 crore per year each. Adidas makes around 17 % ROCE and Reebok 27 %. Metro has not announced its store opening plans for Fila yet, but when fully rolled out, Fila will clearly make a big impact on Metro’s numbers.

Metro is planning to position Fila in the Rs.4,000-plus segment, which is significantly premium than at present, with 300-400 stores for Fila alone in the long run. Besides this, Fila will also be available through 500-odd Metro & Mochi stores. The company will also sell Fila accessories and apparels, besides footwear, besides the Proline range. Fila rollout will also see a sharp spike in costs I think, both for branding & promotion as well as operating costs. Fila will be sold entirely on COCO model. And then there will be license fees, about which the company has not revealed anything so far. For the long term, the sports footwear category is growing at 25 % per annum, faster than all others. The full Fila impact will come in FY26, not before. Even the analyst estimates for FY25 do not justify current valuations.

(Source: Trendlyne)

I think market is pricing in a Rs.1,000 crore revenue from Fila in FY26 probably.

(Note: This was written before today’s market opened. No idea if there is any specific news today.)


A small addition, One peer that outperformed them all is Redtape Ltd. whose Sales grew by 28.7%.