Page Industries Q2 Results Review - Better-Than-Expected Performance; Retaining A Hold: Anand Rathi

Anand Rathi Report

Page Industries Ltd.’s Q2 figures exceeded our estimates and consensus. The QoQ 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. Working capital days improved, led by the focus on inventory health, resulting in better cashflows. Net cash reserves were higher at ~Rs 6 billion (Rs 3.2 billion 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.

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 Rs 48,947 target price, 55 times FY27e EPS of Rs 890.

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