ICICI Direct has given Hold recommendation for Page Industries with a target price of Rs. 31500 in its research report issued on Feb 11, 2021

ICICI Direct’s research report on Page Industries

Driven by strong demand for WFH athleisure wear & womenswear, Page reported healthy sales growth in Q3FY21. Revenue grew 17% YoY to Rs 927.1 crore with volumes up 10% YoY to 47.6 million pieces (higher ASPs owing to higher share in athleisure wear). EBITDA margins were near all-time highs of 24.4% (up 690 bps YoY) on account of gross margin expansion (228 bps) and tight leash on operating overheads (employee, other expenses as percentage to sales down 119 bps, 344 bps YoY, respectively). We believe current margins are unsustainable in nature and expect will normalise in the 21-22% range. Absolute EBITDA grew 63% YoY to Rs 226.1 crore. Driven by healthy operational performance and higher other income (up 19% YoY to Rs 4.2 crore), PAT grew 77% YoY to Rs 153.7 crore. The company highlighted that men’s innerwear segment (core portfolio for Page) is yet to fully recover to their pre-Covid levels. The management indicated that it continues to witness increasing trend in sales particularly in e-commerce channel and the athleisure product category. Liquidity position remained strong with cash & cash equivalents increasing 23% QoQ to Rs 494 crore. Page has declared a second interim dividend of Rs 150/share (Rs 250/share in YTDFY21).


We reiterate HOLD rating on the stock with a revised target price of Rs 31500 (56x FY23E EPS, previous TP: Rs 26985).