Anand Rathi's research report on Page Industries
Page’s Q2 figures exceeded our estimates and consensus. The q/q better demand was aided by festivals at quarter-end, and a gradual rural recovery. Despite normalisation in athleisure, the company is still seeing premiumisation in innerwear, which is driving realisation growth. WC days improved, led by the focus on inventory health, resulting in better cashflows. Net cash reserves were higher at ~Rs6bn (Rs3.2bn at end-FY24). Management’s EBITDA margin guidance is 19-21%, led by stable input costs and operating efficiencies, despite higher IT spends expected in H2. The company’s encouraging performance, despite a challenging external environment was led by production efficiencies, ARS implementation, focus on digitization, investment in marketing, product launches and calibrated network expansion.
Outlook
Our FY25e/26e revenue remain unchanged, but our EPS is 2.5% higher on average. We introduce FY27e and retain a Hold rating, with a higher Rs48,947 TP, 55x FY27e EPS of Rs890.
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