Hold Page Industries: target of Rs 44000: ICICI Securities

ICICI Securities's research report on Page Industries

Page Industries (PAGE) had underwhelming growth in revenue (+7% YoY) and volume (5% YoY) amidst demand challenges, leading to sequential deceleration, while channel inventory has largely normalised. Further, acceleration of growth rates would require an improvement in the demand environment (as per management). It appears medium-term revenue growth expectations [likely] getting reset lower unless there is material acceleration in consumption demand. Retail network has started to improve sequentially after consolidation for last few quarters. Operating margin improved by 434bps to 23%, driven by lower cotton prices, better mix and better operating efficiency, while it continues to maintain its guidance of 19-21% EBITDA margin with investment requirement towards digitisation. Mr. Karthik Yathindra has been elevated from President – Chief Sales and Marketing Officer to CEO effective Apr’25. HOLD.

Outlook

We cut our earnings estimate by ~5% for FY26E. We model revenue / EBITDA / PAT CAGR of 10% / 15% / 18% over FY24-27E, respectively. Maintain HOLD with DCF-based unchanged TP of INR 44,000. Downside risks: Underperformance of men’s innerwear segment and sharper-than-expected RM inflation. Upside risk: Faster-than-expected recovery in volume.