Page Industries Ltd - Fullerton Securities

Page Industries Ltd (Page), promoted by the Genomal Brothers in 1995, is the exclusive licensee of Jockey International Inc (US) for manufacture and distribution of the Jockey brand innerwear/leisure wear for men and women in India, Sri Lanka, Bangladesh, Nepal and UAE. The agreement is in place till 2030. The company paid a royalty of 4.9% of sales. Page has also been appointed the India franchisee for Speedo, a swimwear brand.

Leading Global branded Innerwear Company: - Jockey is an established & well know inner ware brand. Page is the sole licensee of the Jockey brand in India and is the leader in the India innerwear (undergarments) market. We expect the branded innerwear market to continue to grow at CAGR of 15-20% over the medium term, driven by increasing consumer aspirations and the shift from the unorganized segment to branded goods.

Shift from unorganized to organized segment to aid overall growth: - Indian apparel market has been witnessing a shift to organized segment over the past couple of years. The share of the organized segment in the overall pie has increased from 13% in 2005 to 16% in 2010 and the same is expected to go up to 40% in 2020E. It is expected to grow more rapidly at a CAGR of ~22% during 2010-2020E as compared to the apparel industry which is expected to grow as 10.6%. This is an advantage for organized players.

Tie-up with Speedo to boost up the top line going ahead: - Page has tied up with swimwear brand Speedo International to manufacture market and distribute the brand in India. Under the exclusive licensing agreement, effective from July 2011, the company will make swimwear, water shorts, apparel, equipment and footwear in India. Page will be able to leverage the strong distribution network created for the innerwear products to market this range of swimwear products also.

Based on a standalone FY14 P/E multiple of 24, the fair value for the company works out to Rs 3,336.

Source : Equity Bulls

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