The credit rating agency has reaffirmed the short term rating at 'CARE A1+' and the long term rating at 'CARE AA' with ‘Stable' outlook.

Care Edge Ratings said that the ratings assigned to the bank facilities of Metro Brands (MBL) continue to derive strength from the vast experience of its promoters and the long track record of the company in the footwear business, the established market position of the company with a wide distribution network across India, resulting in stable operational performance on a sustained basis, as well as comfortable financial risk profile characterised by strong liquidity position and low overall gearing.

CARE Ratings notes that the performance of the company was impacted significantly during the first and second wave of COVID; nevertheless, it has rebounded strongly since then, as reflected by its 9MFY22 performance, notably with Q3FY22 recording the highest ever quarterly sales in MBL's history. The momentum is expected to continue in light of the pandemic being under control to a considerable extent.

The above strengths are, however, partially tempered by the highly competitive nature of the industry dominated by unorganised players, and the dependence on unorganised vendors/third-party for manufacturing.

The ability to adapt to dynamic industry trends and scale up operations successfully would be a key rating factor.

Metro Brands owns and operates a chain of fashion footwear and accessories stores, and has a countrywide network of an exclusive 629 stores of Metro, Mochi, Walkway, Crocs, among others, with a presence in more than 140 cities, spread across 30 states and UTs, as on 31 December 2021.

The company's consolidated net profit rose 56.89% to Rs 101.27 crore on a 59.03% increase in sales to Rs 483.77 crore in Q3 FY22 over Q3 FY21.

The scrip advanced 0.62% to currently trade at Rs 602.15 on the BSE.