Buy Page Industries; target of Rs 27490: Motilal Oswal
Motilal Oswal 's research report on Page Industries
Expansion of Exclusive Brand Outlets (EBOs) is happening at a massive pace. The company is adding ~80 outlets in February/March 2018 and likely another 500 in FY19, taking the total EBO count to ~1,000 by end-FY19. After forming ~15% of sales in FY17, EBOs are expected to contribute ~40% of sales by FY20 – the year when all the new EBOs will complete at least a year of operations.
Sharply increased pace of EBO expansion and increased outsourcing reflect management’s confidence on future prospects and also have positive implications for incremental RoCE improvement. We maintain Buy with a TP of INR27,350 based on 50x Mar’20E EPS, at a 10% discount to three-year average P/E.
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