Metro Brands Announces Substantial Dividend Payout: Rs 3 Interim and Rs 14.5 Special Dividend Per Share
In a significant move that signals strong financial position despite recent profit challenges, Metro Brands Ltd. has declared a substantial dividend payout for its shareholders. The board of directors of the premium footwear retailer announced on Friday, February 28, 2025, an interim dividend of Rs 3 per share, complemented by a special dividend of Rs 14.5 per share for the financial year 2024-25.
Dividend Details and Timeline
The combined dividend announcement of Rs 17.5 per share represents a significant return to shareholders of the company, which operates popular footwear retail chains across India. According to the regulatory filing, both dividends will be paid on equity shares having a face value of Rs 5 each.
For shareholders looking to benefit from this payout, the company has set March 7, 2025 as the record date for both the interim and special dividends. The filing further clarified that the payment will be processed within 30 days from the declaration date, ensuring shareholders receive their funds by late March or early April.
Recent Financial Performance
This generous dividend declaration comes against the backdrop of mixed financial results in the recent quarter. According to the consolidated financial results released last month, Metro Brands experienced a slight decline in profitability for the quarter ended December 2024.
The company's net profit for Q3 FY25 stood at Rs 95.1 crore, representing a 3.7% decrease compared to Rs 98.8 crore reported in the same period of the previous fiscal year. Despite this modest profit contraction, the company demonstrated strong top-line growth, with revenue increasing by 10.6% to Rs 703 crore, up from Rs 636 crore in the year-ago period.
A particularly bright spot in the quarterly results was the company's EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization), which showed a healthy growth of 13.1% to reach Rs 225 crore, compared to Rs 199 crore in the corresponding quarter of the previous year. The EBITDA margin also expanded to 32% from 31.3% a year earlier, indicating improved operational efficiency despite challenging market conditions.
Market Response and Analyst Outlook
Despite the announcement of substantial dividends, Metro Brands' shares closed lower on Friday's trading session. The stock finished at Rs 1,117.15 per share on the National Stock Exchange, down 3.85% for the day, compared to a 1.86% decline in the benchmark Nifty 50 index.
The stock's performance over the past year has been relatively stable, with a modest decline of 0.76% over the last 12 months. However, analyst sentiment remains predominantly positive, with 19 out of 27 analysts tracking the company maintaining a 'buy' rating on the stock. Four analysts recommend a 'hold' position, while another four suggest 'sell,' according to Bloomberg data.
The average of 12-month price targets from analysts implies a potential upside of 15.5% from current levels, suggesting confidence in the company's long-term business prospects despite near-term profit pressure.
Business Outlook
The substantial special dividend announcement may be interpreted as management's confidence in the company's financial stability and future growth prospects. The robust revenue growth and expanding margins suggest that Metro Brands continues to strengthen its market position in India's organized footwear retail sector, even as it navigates short-term profitability challenges.
For investors, the significant dividend yield resulting from this announcement provides an attractive income component to complement the potential capital appreciation indicated by analyst projections.
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