Page Industries - 3QFY2013 Result Review - Angel Broking

Page Industries (CMP - Rs. 3,365/ TP: -/ Upside: -)

For 3QFY2013, Page Industries reported mixed set of numbers. The company's top line grew by 25.6% yoy to Rs. 216cr from Rs. 172cr in same quarter last year, marginally above our estimate of Rs. 207cr for the quarter. On the other hand, the EBITDA margin for the quarter contracted marginally by 17bp and came in at 17.0%, against our estimate of 20.8%. On qoq basis the operating margin dipped substantially by 302bp on account of higher employee cost (on account of the capacity expansion plans) and other expense (mainly the selling and advertisement expense) as a per cent of net sales. Consequently, the company reported a profit of Rs. 25cr, 27.6% higher yoy from Rs. 20cr in 3QFY2012, against our estimate of Rs. 31cr.

The company is on expansion mode and expects the capacity to increase to 154mn pieces p.a. by December, 2013 from current capacity of 128mn pieces p.a. At the CMP of Rs. 3,365, the stock is trading at a PE of 25.9x FY2014E earning. We recommend Neutral view on the stock due to the high valuation.

Source : Equity Bulls

Keywords