Angel Broking is bullish on Page Industries and has recommended accumulate rating on the stock with a target of Rs 3438 in its February 15, 2013 research report.
“For 3QFY2013, Page Industries (Page) reported a mixed set of numbers. The company's top-line grew by 25.6 percent yoy to Rs216cr, from Rs172cr in the same quarter last year, marginally above our estimate of Rs207cr for the quarter. On the other hand, the EBITDA margin for the quarter contracted marginally by 17bp yoy and came in at 17.0 percent, against our estimate of 20.8 percent. Consequently, the company reported a profit of Rs25cr, 27.6 percent higher yoy from Rs20cr in 3QFY2012, but 17 percent lower than our estimate of Rs31cr.”
“According to industry reports, the Indian innerwear industry stood at Rs14,000cr (in FY2011) and is expected to grow at a CAGR of 13.2 percent to Rs43,700 by FY2020. The innerwear market in India is underpenetrated with per capita spend significantly lower than other Asian peers which provides huge opportunity to the company. With the agreement of exclusivity for 18 years of JOCKEY® and a market share of 21 percent in men’s segment and 12 percent in women’s segment (in the organized innerwear market), we expect Page to tap the opportunity and report a revenue CAGR of 23.7 percent to Rs1,046cr in FY2014. Page’s strong brands and pan-India distribution channel will aid it in capitalizing on the opportunity. In addition, the expansion plan of manufacturing 196mn pieces per annum by FY2017E (~150mn pieces by December 2013) from the current capacity of 128mn pieces, with a capex of ~Rs30cr per year, is on way.”
“We expect Page to register a revenue CAGR of 23.7 percent to Rs1,046cr over FY2012-14. Given the cost pressure, we expect margin to be flat by FY2014 at 19.6 percent. Consequently the profit is expected to grow at a CAGR of 25.5 percent to Rs142cr. At the current market price, the stock is trading at a PE of 25.4x FY2014E earnings. We maintain our Accumulate recommendation on the stock with a target price of Rs3,438 based on a target PE of 27.0x for FY2014E,” says Angel Broking research report.
Institutional holding more than 40% in Indian cos
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