Page Industries stock has corrected nearly 20% from its October 2022 peak, possibly due to an expected moderation in growth in the third quarter versus recent quarters. In the view of brokerage and research firm Emkay, the moderation is partly due to an inflation-led slowdown in consumption and partly due to a higher base (demand and channel filling on the GST hike coming last year).
“Topline growth should come back strongly in Q4, with a reversal from a higher base, delayed winter and better supply-chain management. Beyond near-term challenges, business fundamentals are in relatively good shape with investments in capacity/distribution expansion, product innovations and backward integration (in-house manufacturing for elastics and cups for women’s/premium innerwear).”
Operational efficiencies should also improve with better fill rates on new supply-chain solutions (blue-yonders) and ARS implementation. The same is reflected in PAG maintaining medium-term outlook despite near-term headwinds, according to the brokerage.
“Better asset sweating and stable cotton prices should gradually lead to margin-/ROIC-profits. Single-digit market share in women/athleisure, best-in-class distribution and strong product-value proposition should help PAG deliver mid-teen EPS CAGR over FY25-35E, in our view,” MK upgrades the stock Buy rating with target price of 50,500 each.
Page has expanded its distribution network versus pre-Covid, owing to an increase in the number of distributors by about 30%, a 40% increase in the channel-sales team, and a 60-80% expansion of the EBO/MBO network. This is well supported by the expansion of its product portfolio and category-specific marketing campaigns, the brokerage highlighted.
Page Industries is involved in the manufacturing and retailing of innerwear, and is the exclusive licensee of Jockey International in India, Sri Lanka, Bangladesh, Nepal, Oman, Qatar, Maldives, Bhutan and the United Arab Emirates. It is also the exclusive licensee of Speedo International Limited to manufacture, market and distribute the Speedo brand in India.
multibagger stock Has gained over 16800% in 15 years since its listing in March 2007 when it was trading at approx 270 per share level currently hovering above 44,000 level. Shares of Page Industries are up about 8% in 2022.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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