Page Industries gains 8% on strong operating performance in March quarter

Shares of Page Industries jumped 8% to Rs 45,176 on BSE in Friday trading after the company reported a strong performance in the March quarter (Q4FY22). Earnings before interest, tax, depreciation and amortization (EBITDA) margin improved 470 basis points (bps) year-on-year (YoY) and 290 bps quarter-on-quarter (QoQ) to 24%, driven by better operational efficiency.

Clothes and apparel stock hit a 52-week high of Rs 46,705 on April 26, 2022. At 10:26 a.m.; it was trading up 8% at Rs 44,935, against a rise of 0.55% in the S&P BSE Sensex.

Meanwhile, the company’s reported profit after tax (PAT) jumped 64.9% year-on-year to Rs 190.5 crore, on the back of a 37.2% year-on-year increase in revenue to 3 887 crore rupees.

That aside, the company remains optimistic that all product categories and channels will continue to witness an upward trend and investments in leadership, product innovation, warehousing, technology and logistics support.

“Sales momentum has accelerated significantly across all of our product categories, supported by the expansion of our existing portfolio and network. We are well placed on a growth trajectory and remain optimistic about achieving a long-term sustainable growth,” management said.

Page Industries is the exclusive licensee of JOCKEY International Inc. (USA) to manufacture, distribute and market the JOCKEY® brand in India, Sri Lanka, Bangladesh, Nepal, Oman, Qatar, Maldives, Bhutan and in the United Arab Emirates. Page Industries is also the exclusive licensee of Speedo International for the manufacture, marketing and distribution of the Speedo brand in India.

However, analysts at Motilal Oswal Financials maintain a “neutral” rating on the stock. They believe that near-term challenges persist due to the sharp increase in yarn costs and the high basis for higher achievement from the Athleisure segment.

“After a few years of declining earnings (-4.3% PBT CAGR in FY18-21), its performance in FY22 was encouraging, translating into an improved outlook. RoCE has also returned to over 50% after 15 years, after falling in the late 30s in recent years.Page Industries’ higher multiples will continue, thanks to healthy revenues and earnings visibility.However, valuations at 56x FY24E EPS are rich, leading us to maintain our neutral rating,” the brokerage added.

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