Page Industries Ltd (PIL) share price jumped more than 7 percent in the morning session on May 27, a day after the apparel manufacturer reported a 64.86 percent year-on-year increase in net profit at Rs 190.52 crore for the fourth quarter ended March 31, 2022.
The company had posted a net profit of Rs 115.56 crore during the January-March period a year ago, Page Industries said in a regulatory filing.
Revenue from operations was up 26.15 percent at Rs 1,111.11 crore during the quarter under review, as against Rs 880.76 crore in the year-ago period.
The company’s expenses were at Rs 870.04 crore, up 18.58 percent from Rs 733.69 crore in the corresponding period of 2020-21.
For the fiscal year ended March 2022, PIL's net profit jumped 57.53 percent to Rs 536.53 crore. It had reported a net profit of Rs 340.58 crore in the previous fiscal. Its revenue from operations was at Rs 3,886.46 crore in 2021-22, 37.18 percent higher from Rs 2,832.96 crore in the year-ago period.
The company also declared a fourth interim dividend of Rs 70 a share for FY 2021-22.
Page Industries is the exclusive licensee of Jockey International Inc (USA) for manufacturing, distribution and marketing in India, Sri Lanka, Bangladesh, Nepal, Oman, Qatar, Maldives, Bhutan, and UAE. It is also the exclusive licensee of Speedo International for the Indian market.
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At 10.15 am, Page Industries was quoting at Rs 44,860, up Rs 3,194.85, or 7.67 percent. It touched an intraday high of Rs 45,175.90 and an intraday low of Rs 43,031.60.
Research and broking firm ICICI Securities has an “add” rating on the stock with the target of Rs 46,000 a share.
"Page delivered ahead-of-expected revenue growth of 26 percent YoY with 8.7 percent volume growth (2 year CAGR: 17 percent). We believe in 2020-30, volume growth will have to be the key driver of growth unlike 2010-20, where Page enjoyed good price/mix benefit (price increases should now be more calibrated, barring periods of high RM pressure). Page does have (operating) margin expansion potential; current quarter’s performance is a testament to it.
The company's EBITDA margins have remained in the narrow range of 18-21 percent for the more than 10 years. Page Industries has front-ended investments in new avenues. For its pace of growth, the leverage-led (operating) margin expansion has not (yet) played out, the brokerage firm said.
Motilal Oswal has a “neutral” call on the stock with target of Rs 41,000 a share. According to the research firm, strong sales momentum led to a 15 percent/19.8 percent revision to FY23/FY24 EPS estimate, even as near-term challenges on higher material cost remain.
After a few years of an earnings decline (-4.3 percent PBT CAGR over FY18-21), its performance in FY22 has been encouraging, resulting in an improved outlook, it said. Return in capital employed (RoCE) also revived to over 50 percent after 15 years, having dipped to the late 30s in recent years, it said.
The company's higher multiples will sustain, driven by healthy revenue and earnings visibility. “However, valuations at 56x FY24E EPS are rich, which leads us to maintain our neutral rating,” Motilal Oswal said.
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