Q3FY21 Result Update - Page Industries - ICICI Direct

Driven by strong demand for WFH athleisure wear & womenswear, Page reported healthy sales growth in Q3FY21. Revenue grew 17% YoY to Rs. 927.1 crore with volumes up 10% YoY to 47.6 million pieces (higher ASPs owing to higher share in athleisure wear). EBITDA margins were near all-time highs of 24.4% (up 690 bps YoY) on account of gross margin expansion (228 bps) and tight leash on operating overheads (employee, other expenses as percentage to sales down 119 bps, 344 bps YoY, respectively). We believe current margins are unsustainable in nature and expect will normalise in the 21-22% range. Absolute EBITDA grew 63% YoY to Rs. 226.1 crore. Driven by healthy operational performance and higher other income (up 19% YoY to Rs. 4.2 crore), PAT grew 77% YoY to Rs. 153.7 crore. The company highlighted that men's innerwear segment (core portfolio for Page) is yet to fully recover to their pre-Covid levels. The management indicated that it continues to witness increasing trend in sales particularly in e-commerce channel and the athleisure product category. Liquidity position remained strong with cash & cash equivalents increasing 23% QoQ to Rs. 494 crore. Page has declared a second interim dividend of Rs. 150/share (Rs. 250/share in YTDFY21).

Valuation & Outlook

We revise our earnings estimates upwards by 30%, 8%, 10% for FY21, FY22, FY23E, respectively, to reflect current quarter's performance. We bake in revenue, earnings CAGR of 13%, 22%, respectively in FY20-23E. Page continues to have a healthy balance sheet with robust liquidity position (Rs. 494 crore) and strong RoCE of 55%+. We like the company's new initiatives (focus on kids wear segment, implementation of auto replenishment system, new launches in athleisure wear and thrust on increasing penetration in rural areas) to propel sales and earnings growth. While we stay positive on the stock, we believe major positives are priced in the current valuations. Hence, we reiterate HOLD rating on the stock with a revised target price of Rs. 31500 (56x FY23E EPS, previous TP: Rs. 26985).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PageInds_Q3FY21.pdf

Shares of PAGE INDUSTRIES LTD. was last trading in BSE at Rs.30685.85 as compared to the previous close of Rs. 30744.05. The total number of shares traded during the day was 1439 in over 639 trades.

The stock hit an intraday high of Rs. 31199.95 and intraday low of 30527.65. The net turnover during the day was Rs. 44422181.

Source : Equity Bulls

Keywords