Page Industries Ltd. share price target

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.

The supply chain for the company is close to normal levels after issues faced by vendors during the initial period of the quarter. Revenue trajectory has been on an upward trend on a MoM basis, with August sales reaching preCovid levels while from September it witnessed double digit growth. The momentum is expected to sustain running into the festive season. Currently, 94% of MBOs, 100% EBOs and 92% of LFS are operational. E-commerce channels have seen significant growth with both, own website and third party platforms revenue share increasing. The company added 60 new exclusive Jockey outlets taking the total store count to ~800+....

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...

Page Industries (PAGE) Q1FY21 revenue at Rs285 Crs was a sharp miss on our estimates (Est. Rs 405 Crs), and was down 66%/47% YoY/QoQ impacted by steep fall in volumes (down 69%). Volume decline was primarily due to 2/3rd of quarter being washed out due to lockdowns leading

As on date, 96% of EBOs (742), 90% of large format stores (1928 stores) and 80% of multi branded outlets (54000+ touch points) are operational. The company is currently operating at 85% capacity utilisation. E-commerce channels have seen significant growth with both own website and outside e-com platform revenue share increasing. In the offline space, recovery in LFS has been sluggish owing to lower footfalls in malls. The management indicated healthy recovery especially in the athleisure segment from July. Also, primary sales in August have almost reached 100% of pre-Covid level...

3 September 2020 Page Industries (PAG) reported an extremely weak set of numbers in its 1QFY21 results, with a particularly stark miss on EBITDA and PAT, both of which came in at loss. Recovery has been rapid, with August nearly back at last years levels for the corresponding month. However, there is no indication that the company, which has reported flattish EPS over the past two years, has turned the corner on the path to topline and earnings growth. Maintain Employee expenses declined by 4% YoY to INR1.2b, and other expenses fell 66% YoY to INR488m. Volumes declined 69% in 1QFY21 and Average Selling Price (ASP) grew on higher athleisure sales. In 1QFY21, an INR107m provision was taken on slow-moving goods, which may be reversed later. While July had some supply chain issues, recovery was seen to near last years numbers in August.

In addition to contraction in GM, employee expenses remained firm resulted in EBITDA loss during the quarter. GM contraction for the third consecutive quarter was the most discouraging....

Innerwear market in India expected to grow at 12% CAGR in the next decade to Rs743bn from Rs290bn at present. While Page's increasing penetration will provide strong potential to grow. Innerwear is evolving from being functional to a segment with a...

We recommend a SELL on Page Industries with a Target Price of Rs 17,200, downside of 10% from CMP of Rs. 19,105 and Stop Loss Rs 20,100.

Page Industries Annual report 2020 highlights Jockey's strong brand equity and leadership, channel and capacity expansion and sustainability initiatives. Page's volumes de-grew 3.2% in FY20, due to slowdown in the domestic market during the year, further exacerbated by nationwide lockdown in March'20. We expect business to normalise in H2FY21E with complete opening of markets and consumer confidence coming back. Moreover, with strong brand recall of Jockey, strong in-house product development, manufacturing expertise and extensive distribution...