Page Industries Q1 Results Review - Strong Sequential Recovery Across Volumes, Margins, Inventory: Systematix

Systematix Research Report

Page Industries Ltd. reported a decent sequential recovery in Q1 FY24 with a 28% revenue and 31% QoQ volume growth, albeit it was a YoY decline of 11.5% in volume and 7.5% in revenue terms.

Men’s premium innerwear saw the fastest growth while athleisure continued to see a soft performance, which looks like a transient phase. Margin also improved (+564 basis points QoQ) on sequential basis led by cost savings and raw material moderation, but it was still down 270 bps YoY.

Other key highlights were online sales growth of 43% YoY, significant reduction in inventory days from 155 in Q4 to 105 and solid progress on ARS implementation which has stopped impacting sales now.

Profit after tax declined 23.5% YoY to Rs 1.58 billion and grew 102% on QoQ basis. The revenue number looks decent given the high base, bloated channel inventory levels and significant discounting and promotions being offered by peers.

Page Industries' management is confident of a pick-up in growth trajectory from Q3 onwards and maintaining margins in the 19-21% band. It is going slow on capacity expansion and focused on improving inventory health to improve cash flows in the ongoing sluggish environment.

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