Emkay Global Financial's report on Page Industries
Q1 performance was slightly better, with revenue recovery at 60% (10% ahead of estimates) and EBITDA margins at 6.8%. Sales grew 76% yoy to Rs5bn on low comparables, but declined 43% qoq due to the Covid-induced restrictions. Management indicated that Jul'21 sales recovery is healthy and similar to Apr'21. Strong growth plans in Kidswear/Athleisure and aggressive network expansion into Tier-3/4 and rural towns offer good visibility of mid-teens growth ahead. Margin trends are healthy with better cost control despite a steep increase in RM prices and relatively lower price hikes (~7-8% vs. 20% of its peers in the economy category). PAG hinted at returning to 21%+ margins ahead, as sales recover.
Outlook
Strong on-the-ground execution during lockdowns and focus on fast-growing categories (Kids/Athleisure) and strong network expansion keep us positive on PAG. Maintain Buy with a revised TP of Rs37,500 ((55x Sep'23E EPS).
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