Metro Brands Q1 FY27 Results (NSE: METROBRAND)
Signal: Margin expansion
The read
Revenue grew 14.7% YoY but PAT declined 4.8% as employee costs (+20.5%), depreciation (+23.4%), and finance costs (+25.1%) outpaced gross margin expansion. EBITDA margin improved 250bps YoY to 33.4% but operating leverage was absent. Earnings quality flagged due to high other income (20.8% of PBT).
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹720.36 Cr | 14.7% | -6.8% |
| EBIT | ₹155.99 Cr | 1.5% | |
| Net profit | ₹93.79 Cr | -4.8% | |
| EPS | ₹3.44 | -5.0% | |
| EBIT margin | 33.4% |
P&L walk
Revenue growth strong but PAT fell as employee costs (+20.5% YoY), depreciation (+23.4%), and finance costs (+25.1%) grew faster than revenue; gross margin improved 170bps QoQ and 17bps YoY, yet was insufficient to offset cost inflation. Other income at 20.8% of PBT masks operational earnings decline.
Key positives
- Revenue growth maintained at 14.7% YoY, albeit decelerating.
- Gross margin expanded 170bps QoQ to 59.5%, indicating pricing discipline or favourable mix.
- EBITDA margin expanded 250bps YoY to 33.4%, showing cost control at operating level.
Key concerns
- PAT declined 4.8% YoY despite revenue growth, due to cost inflation in employee, depreciation, and finance costs.
- Employee costs grew 20.5% YoY, far exceeding revenue growth, pressuring margins.
- Finance costs rose 25.1% YoY, reflecting higher leverage.
- Other income at 20.8% of PBT masks underlying operational profitability.
Earnings quality: includes non-operating other income
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