Page Industries Ltd. share price target

Background: Page Industries is the exclusive licensee of Jockey International Inc (USA) to manufacture and distribute Jockey brand in India, Sri Lanka, Nepal, Bangladesh and UAE till 2040. They broadly operate in premium men's innerwear; women's innerwear and leisure wear segments. Jockey enjoys high brand recall and they spend ~5% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. They are also exclusive licensee of Speedo swimwear brand in India. Page has network in ~250 cities and ~760 exclusive brand outlets in India. They...

We continue to maintain HOLD rating and raise TP to Rs. 32,800 (Rs.29,364 earlier) while continuing to value the stock at 55x its FY23E EPS as current valuations offer limited upside.

Given the inherent strength of the brand, Page displayed a resilient performance in FY21, notwithstanding challenges faced in H1FY21. Despite revenues declining ~66% in Q1FY21, the company exited the year with mere 3% revenue de-growth. While volumes de-grew ~12% YoY in FY21, change in product mix towards athleisure wear led blended realisations to increase ~9% YoY. On full year product wise growth trends, the management indicated that athleisure, kids and e-commerce have reported volume growth while men's and women's innerwear saw a decline. Going...

While revenue and volume growth in 4QFY21 were ahead of our estimates, lower than expected EBITDA margin resulted in EBITDA and PBT that were in line with our estimates. PAG has taken a 4-5% price increase in 4QFY21 to account for higher yarn prices. The ongoing lockdown in most parts of India has led to store closures. Key factories of PAG in Bengaluru have been shut for nearly a month. While the management is confident of a rebound in demand after a gradual return to normalcy once the lockdowns are lifted, the ongoing lockdowns have...

Background: Page Industries is the exclusive licensee of Jockey International Inc (USA) to manufacture and distribute Jockey brand in India, Sri Lanka, Nepal, Bangladesh and UAE till 2040. They broadly operate in premium men's innerwear; women's innerwear and leisure wear segments. Jockey enjoys high brand recall and they spend ~5% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. They are also exclusive licensee of Speedo swimwear brand in India. Page has network in ~250 cities and ~760 exclusive brand outlets in India. They...

EBITDA margin improved by 691bps YoY to 24.4% on account of better product mix and reduction in A&P; spends. Strong margin, debt free status and doubling of capacity by 2025 will help to tap vigorous opportunity in the sector. Increase in footfalls driven by removal of restrictions and...

We continue to maintain HOLD rating and rasie TP to Rs. 29,364 (Rs.20,998 earlier) while continuing to value the stock at 50x its FY23E EPS as current valuations offer limited upside.

For 9MFY21, revenue declined 19% YoY vs. decline of 66% in Q1FY21. The recovery was mainly driven by high double digit growth for athleisure wear & womenswear. The management highlighted athleisure segment in value terms is nearly close to its largest segment i.e. menswear. The company remains confident of sustainability of demand from athleisure wear based on the stickiness of new trials. Page has accelerated its distribution touchpoints by ~7000 outlets (4000 added in Q3) and expects to exit FY21E with addition of ~10000 outlets. It has a launched bouquet of products...

On MoM basis, sales improved gradually. The company achieved sales normalization in August and witnessed strong growth in September. Despite GM contraction, better operating efficiency and lower A&P; spends helped EBITDA margins to expand by 310bps. Secondary demand was ahead of primary throughout the quarter, signifying steady increase in sales growth. Going ahead, we believe that the company's focus to increase...

Page Industries'(PAGE) Q2FY21 revenue at Rs 740 crs was broadly in-line with our estimates at Rs 755 Crs, and was down 5% YoY led by 13% volume de-growth despite ~9% value growth.