Emkay Global Financial's research report on Page Industries
Q3 EBITDA/PAT were 20-25% lower than estimates, owing to weaker margins. Revenue grew 3%, led by volume/realization growth of -11%/15% and EBITDA margin declined 530bps (vs. expectations of 180bps decline). Margin weakness was attributed to realization of high-cost inventory, lower factory utilization on weak volumes and higher employee/brand investments. Volume decline was led by lower primary billings on ARS implementation and subdued demand for Athleisure/masks. Q4 is also likely to be weak, with spill-over of the ARS impact and sluggish demand environment. While competitive intensity remains high, PAG denied any market-share loss and emphasized on retaining its strong medium-term growth outlook. Focus remains on cost savings till revival of demand. We cut FY23/24E EPS by 3-5%, on need of higher brand investments. Focus on women/athleisure categories and distribution expansion should help PAG to deliver mid-teen earnings growth over the medium term.
Outlook
We maintain BUY with revised TP of Rs48,800 (on unchanged multiple of 58x FY25E EPS).
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