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...

Page Industries (PAGE) reported lower than expected Q4FY20 numbers with revenue declining by 11% YoY at Rs 541 Crs vs Est Rs582 Crs impacted by steep fall in volumes (down by 19% vs 8% decline as estimated).COVID-19 led shutdownsince the beginning of March'20 largely impacted PAGE's sales in Q4F..

Tepid consumer demand & high competitive intensity impacted the performance in FY20. Revenue grew 3.3% YoY to | 2945.4 crore with volumes declining 3.2% YoY to 168 mn pieces in FY20 (for 9MFY20, revenue grew 7% YoY). Increased investments in marketing spend, technology and staff led Page to report one of its lowest ever EBITDA margin of 15.6% in FY20 (for 9MFY20, EBITDA margins were down 243 bps YoY to 19.7%). Post lockdown relaxation, green shoots were visible with the company seeing strong demand and average daily sales of certain stores reaching pre-Covid...

23 June 2020 Page Industries (PAG) 4QFY20 results missed estimates significantly on top line, and particularly, on EBITDA/PAT levels. Even with gradual reopening of stores, demand trend for the first 2-3 quarters of FY21 is likely to be weak. There is no evidence yet that the company has turned the corner toward recovering anywhere close to the ~30% earnings CAGR witnessed during FY08-18. The PAG stock is fully valued at 50.5x FY22E EPS.

Page Industries Ltd is the exclusive licensee of JOCKEY International Inc. (USA) for manufacture, distribution and marketing of the brand Jockey' in India, Sri Lanka, Bangladesh, Nepal and UAE.

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 ~720 exclusive brand outlets in India. They...

Continuing business investment while awaiting demand revival Tepid consumer demand and high competitive intensity impacted the performance of Page Industries. It resulted in lower offtake from distributors and a decline in footfalls in its own exclusive stores (720+). For 9MFY20, revenues grew 7% YoY to | 2404 crore, with volume growth of mere 1% YoY to 138 million pieces. In a bid to beat the blues, the management has undertaken several initiatives such as new product launches, sustained enhancement in distribution reach and higher investments in marketing and...

13 February 2020 PAG reported a disappointing set of numbers on both volumes and earnings, with EBITDA declining 16% YoY in 3QFY20. Reported operating margin was the lowest in 30 quarters, and adjusted for the Ind-AS 116 impact, the margin was among the lowest ever. While the long-term growth potential is high and the past track record impressive, valuations of 55.7x/47.6x FY21/22E EPS are expensive. Management commentary also did not assuage concerns about the lack of earnings recovery in the near term. Maintain 490bp YoY to 17.5% due to higher employee costs (+110bp YoY), partly offset by lower other expenses (-20bp YoY). Investments in technology implementation and staff recruitment (mainly on tech and kids businesses) have also impacted the EBITDA margin. Inventory days have come down to ~75 from 85 as of Mar19. Kidswear has shown an encouraging demand trend.

Products, distribution enhancement to aid revenue growth For H1FY20, revenues grew 7% YoY to | 1610 crore, with volume growth of 2.8% YoY to | 94.8 million pieces. The management indicated that consumer sentiments improved gradually with same store sales growth coming in better in Q2FY20 compared to the previous quarter. Increase in marketing spends, new product launches and enhanced distribution touch points has translated into steady volume growth in Q2FY20. We expect volume growth trajectory to gain traction in H2FY20 on the back of new...

Sector: Apparels /Mid-Cap | Earnings Update 1QFY20 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. In the men's and women's segment, they have a market share of ~21% and ~12% respectively. They are also exclusive licensee of Speedo swimwear brand in India. Page has...