The credit rating agency has maintained 'stable' outlook on the same.

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.

The ratings also factor the improvement in the operating performance of the company in FY22 & 9MFY23 on the back of improved demand from all segments, after recovering from adverse market conditions in the last two fiscals on account of covid.

The company also got listed on the stock exchanges via an initial public offering (IPO) in December 2021, with fresh equity proceeds of Rs 295 crore proposed to be utilised to fund the future growth plans.

MBL has added well-known brands such as ‘Fila' and ‘Proline' to its portfolio by acquisition of Cravatex Brands Limited during FY23. These brands are expected to contribute to incremental growth going forward.

The above strengths are tempered by the highly competitive & fragmented nature of the industry dominated by unorganised players, aggressive expansion by the new brands and the dependence on unorganised vendors/third-party for manufacturing.

The ability to adapt to dynamic industry trends and scale up operations successfully while maintaining healthy margins and strong financial risk profile, 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 720 stores of Metro, Mochi, Walkway, Crocs and Fitflop with a presence in more than 164 cities, spread across 30 states and UTs, as on December 31, 2022.

The company's consolidated net profit increased 11.2% to Rs 113 crore on 23.8% rise in revenue from operations to Rs 599 crore in Q3 FY23 over Q3 FY22.

The scrip shed 0.90% to end at Rs 802.30 on the BSE on Thursday.