ICICI Direct recommended hold rating on Page Industries with a target price of Rs 18,050 in its research report dated August 09, 2019.
ICICI Direct's research report on Page Industries
Given the challenging market conditions, Page reported another muted performance, with volumes de-growing 2.4% YoY to 49.1 million pieces in Q1FY20. The management indicated footfalls in its exclusive branded outlets (EBO’s) witnessed significant decline owing to consumption slowdown. The same trend was visible in July as well. Revenue grew marginally 2.4% YoY to Rs 835.0 crore, mainly led by 4.4% growth in realisations to Rs 166.9/piece. EBITDA margins (adjusted for Ind-AS 116 impact) declined 190 bps YoY to 21.3% on account of higher employee expenses (up 19% YoY). Following weak operational performance, PAT declined 11.0% YoY to Rs 110.7 crore.
However, we expect near term pressure to persist. We revise our estimates downwards and expect revenue and earnings to grow at a CAGR of 10% and 12% respectively. We reiterate our HOLD rating on the stock, with a revised target price of Rs 18050 (41.0x FY21E EPS) (earlier TP: Rs 19000).
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