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Research
Page Industries - 4QFY2013 Result Update - Angel Broking
Posted On : 2013-06-02 05:13:49( TIMEZONE : IST )
For 4QFY2013, Page Industries (Page) reported a healthy set of numbers, which were in-line with our estimates at all fronts. The company's top-line grew by 35.5% yoy to Rs. 209cr, against our estimate of Rs. 201cr for the quarter. The EBITDA margin for the quarter expanded by 190bp yoy and came in at 17.6%, mainly because of lower other expense as a percent of net sales. Consequently, the company reported a profit of Rs. 24cr, 38.5% higher yoy from Rs. 17cr in 3QFY2012, in-line with our estimate.
Presence in fast growing segment with strong brand recall to drive growth Page operates in mid and premium category of the innerwear segment in India which is of the size of ~Rs. 5,000cr. The innerwear market in India which is growing at a rate of ~24%, is underpenetrated with per capita spend significantly lower than in other Asian peer markets, thus providing huge opportunity to the company. With a market share of 21% in men's segment and 12% in women's segment, we expect Page to tap the opportunity and report a revenue CAGR of 21.8% to Rs. 1,282cr in FY2015E. Page's strong brand recall and pan-India distribution channel will aid it in capitalizing on the opportunity. Also, Page has aggressive expansion plan of manufacturing 196mn pieces p.a. by FY2017E from current 133mn pieces p.a. to meet the increasing demand as consumers are shifting from local to the branded products.
Outlook and valuation: Given the huge market size, Page's predominant position, strong brand recall, high dividend payout and capacity expansion plans for next four years to cater to the increasing demand; we remain positive on the company's growth outlook. We expect Page to register a revenue and a profit CAGR of 21.8% and 23.4% to Rs. 1,282cr and Rs. 171 respectively over FY2013-15E. At the CMP, the stock is trading at a PE of 27.6x FY2015E earning. We maintain our Accumulate recommendation on the stock with a revised target price of Rs. 4,611 with a target PE of 30.0x for FY2015E.
