Dolat Capital is bullish on Page Industries and has recommended accumulate rating on the stock with a target of Rs 3800 in its February 15, 2013 research report.
“Page Industries, Net Sales at Rs 2.16bn up 25.6 percent YoY (Dolat est. Rs 2.2bn). EBITDA at Rs 367mn (est of Rs 455mn) was up 24 percent YoY as EBITDA margins declined by 16bps YoY to 17 percent (est. of 20 percent). Gross margin expanded by 331bps YoY to 52 percent. However higher other exp and employee cost restricted EBITDA margin expansion. Other expenditure was up 240bps YoY and employee cost 107bps YoY PBT at Rs 375mn was up 29 percent YoY. Net profit grew by 27 percent YoY to Rs 254mn (Dolat est of Rs 294mn). Other expenditure increase was on account of higher advertising spends at Rs 180mn. Employee cost increased due to capacity additions. Volume growth for the quarter stood at 15 percent. Volume growth in Men segment was at 12.8 percent, Women segment grew by 13.9 percent while Leisure wear growth stood at 25 percent. Management indicated that women growth would improve in the coming quarter and guided for 15-20 percent volume growth. Raw material cost has beginning to increase and currently stand at Rs 220/ kg. However, the company has booked itself for six month with an average inventory cost of Rs 200/kg. Any decision on price hike is expected to be taken in Oct-Nov 2013.”
“We believe Page Industries strong distribution reach and Jockey brand provides company a strong platform to introduce new products. We have made changes in our estimate marginally to factor in 1) lower volume growth and 2) higher other expenditure. We have lowered our estimate by 4-5 percent. We expect the company to post a CAGR of 23 percent during FY12-15E. At CMP, the stock trades at 27x FY14E EPS of Rs 122.5 and 22x FY15E EPS of Rs 151.6. We recommend Accumulate with a price target of Rs 3800,” says Dolat Capital research report.
Public holding more than 90% in Indian cos
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