- Revenue up 15% YoY in Q3 FY26, driven by festive demand and GST cut.
- EBITDA margin surged 500 bps to 32.7% – a rare double‑digit profit lift.
- E‑commerce sales grew 24% quarter‑on‑quarter, now 12% of total revenue.
- New “MetroActiv” concept brings global sports brands under one roof.
- Board declared a Rs 3 interim dividend, signaling confidence.
Most investors missed the footfall surge – and that mistake could cost them big.
Why Metro Brands' Revenue Spike Beats Sector Trends
Metro Brands Limited (MBL) logged a 15% jump to Rs 811 crore in Q3 FY26, outpacing the average 8‑9% growth seen across Indian apparel and footwear peers. The catalyst was a confluence of seasonal demand—weddings and festivals—and a strategic GST reduction on shoes priced below Rs 2,500. Lower taxes effectively raised the price elasticity of demand, prompting price‑sensitive shoppers to upgrade from informal to branded footwear.
Historically, GST cuts have yielded short‑term sales lifts, but Metro’s disciplined channel execution turned a temporary stimulus into sustained top‑line momentum. Over the nine‑month period, the firm posted a 12% revenue increase, a testament to the durability of its demand‑generation engine.
E‑Commerce Surge: What the 24% Growth Means for Your Portfolio
Digital sales climbed 24% YoY in the quarter, nudging the e‑commerce contribution from 11% to 12% of total revenue. Over the nine‑month window, online revenue grew a striking 35%, now representing 13% of the topline. This acceleration mirrors a broader shift in Indian retail where omni‑channel players are capturing higher share of the rapidly expanding middle class.
Compared with rivals such as Bata and Relaxo, which hover around 8‑9% digital share, Metro’s faster adoption positions it to benefit from lower acquisition costs, richer consumer data, and higher margin opportunities inherent in direct‑to‑consumer models.
Margin Expansion: 500 Basis Points – Is It Sustainable?
EBITDA rose to Rs 265 crore, a 17.6% YoY increase, and the margin expanded by 500 basis points to 32.7%. The uplift stems from a mix of higher average selling prices, cost efficiencies in supply chain, and better store productivity as the network rationalises underperforming locations.
For context, an EBITDA margin above 30% is rare in the Indian footwear space, where averages sit near 20‑22%. If Metro can lock in these efficiencies, the margin tailwind could sustain earnings growth well beyond FY26.
Store Footprint Strategy: New Openings vs Closures
During Q3 FY26, Metro opened 35 stores while closing 11, and added 100 net stores over the nine‑month period after trimming 18 under‑performers. This calibrated expansion reflects a “quality‑over‑quantity” mindset, targeting high‑traffic malls and tier‑2 cities where disposable income is rising faster than in saturated metros.
Peers like Tata Footwear have pursued aggressive roll‑outs, often leading to inventory drag. Metro’s selective approach mitigates that risk and aligns with its improved same‑store sales metrics.
MetroActiv Launch: A Game‑Changer in Athletic Retail
Metro’s newest concept, MetroActiv, bundles global performance brands—Nike, Adidas, Puma, ASICS, Skechers, New Balance, FILA, and New Era—under a single roof. By entering the sports‑performance segment, Metro taps into a market projected to grow at a CAGR of 12% in India, driven by health consciousness and rising youth participation in sports.
The multi‑brand model offers cross‑selling synergies and higher footfall, while the premium positioning can command superior margins. If executed well, MetroActiv could become a flagship format, similar to how Reliance’s “JioMart” redefined grocery retail.
Investor Playbook: Bull vs Bear Cases
Bull Case:
- Continued GST-friendly pricing keeps demand elastic.
- Digital channel scaling drives higher-margin sales.
- Margin expansion sustains profit growth, supporting higher EPS forecasts.
- MetroActiv captures a fast‑growing athleisure niche, unlocking premium pricing.
- Strong cash flow enables dividend continuity and potential share buy‑backs.
Bear Case:
- GST incentives may be rolled back, compressing price advantage.
- Supply‑chain disruptions could erode inventory turns.
- Aggressive store rollout risks over‑capacity if consumer sentiment wanes.
- Competitive pressure from global entrants (e.g., Decathlon) could bite margins.
Investors should weigh the sustainability of Metro’s margin tailwinds against macro‑policy uncertainty. A disciplined watch on GST policy, digital conversion rates, and the rollout performance of MetroActiv will be key to determining whether the stock can deliver a multi‑digit total return over the next 12‑24 months.