BUY Page Ind :: ICICI Securities

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Consistent performance calls for upgrade!
• Page Industries’ (Page) Q1FY15 revenues were marginally lower than
our estimate. A superior operational performance led to in-line PAT
• Revenues increased 24.4% YoY to | 378.3 crore (I-direct estimate:
| 393.3 crore) led by 9.0% volume growth (30.5 million pieces) and
14.2% realisation growth (| 124/piece). Strong growth in the
brassiere and leisure segment aided this performance
• Owing to lower-than-expected selling and advertising expenses and
also relatively lower raw material costs, the operating margin at
20.0% (up 100 bps YoY) was higher than our estimate of 17.9%
• Consequently, PAT at | 54.3 crore (up 26.0% YoY) was in line with
our estimate of | 53.8 crore
Healthy volume growth continues
During FY10-14, volumes have grown at a CAGR of 19.8%. Page has
achieved this on the back of aggressive capacity addition, which has
increased from 2.2 crore pieces in FY07 to 16.3 crore pieces in FY14. We
expect the company to continue the volume growth trajectory at a CAGR
of ~16% led by capacity addition. We expect the total capacity to touch
28 crore pieces by FY17E. We believe that with the launch of newer SKUs,
volume growth should not be a concern for Page.
Rising costs to be passed on
Page is cushioned from rising input costs as it takes price hikes to the
tune of 5-10% per annum, which enables it to maintain operating
margins. The company is confident of maintaining its operating margin
around 20%. Though the operating margin has increased to 21.4% in
FY14 (owing to removal of excise duty), we expect it to stabilise at 21.0%
by FY17E.
Favourable demographics, low penetration to boost growth
The Indian innerwear segment valued at $4 billion is expected to grow at
12% CAGR over the next decade. Page has consistently grown well
above the industry average. We expect the same to continue as India’s
per capita spend on innerwear is ~90% lower than that of Thailand and
China. The market has been growing faster than the overall clothing
market, driven by premiumisation. With discretionary consumer spend in
India continuing to grow, these trends should persist, aided by rising
urbanisation and growth in consumer incomes.
Marginal increase in estimates owing to better operational performance
We have upgraded our FY15E, FY16E operating margin estimates by 38
bps, 48 bps, respectively, led by a better-than-expected operational
performance in Q1FY15. While no price hikes have been taken in Q1FY15,
the company is likely to take price hikes in H2FY15E. This should also aid
in cushioning margins. Consequently, our earnings estimates for FY15E,
FY16E have been revised upwards by 0.7, 1.4%, respectively. We
introduce our FY17E EPS of | 288.7.
Consistent growth with healthy fundamentals; upgrade to BUY
Many consumer oriented companies that have delivered consistent
growth are trading at premium multiples. Similarly, we believe Page
should also command a premium considering its strong fundamentals
and consistent dividend payouts. Page has been able to grow consistently
while many of its peers are struggling to grow. We, thereby, upgrade
Page Industries to BUY with a revised target price of | 8660 (based on 30x
FY17E EPS of | 288.7).



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Page Industries - BUY :: Business Line

Angel Broking: MphasiS- RU2QFY2013 Coal India - RU4QFY2013 Tree House - RU4QFY2013 Sun Pharma - RU4QFY2013 Cipla - RU4QFY2013 Indoco Remedies - RU4QFY2013 Page Industries - RU4QFY2013

Forwarding you the Multiple Scrip’s Result Updates. Kindly click on the links to view the report.

 

MphasiS- RU2QFY2013

 

Coal India - RU4QFY2013

 

Tree House - RU4QFY2013

 

Sun Pharma - RU4QFY2013

 

Cipla - RU4QFY2013

 

Indoco Remedies - RU4QFY2013

 

Page Industries - RU4QFY2013

Page Industries :: Karvy research

Leading Brand with Strong Recall Value
Page Industries’ (Page) strong market presence with the global brand ‘Jockey’
in its arsenal makes the Company the market leader in branded innerwear
segment in India. We expect domestic innerwear market worth Rs. 140 bn to
grow at 12%‐15% over a couple of years. Page – with its extensive
distribution channel coupled with fully integrated in‐house manufacturing
facilities and accredited quality controls – is expected to benefit the rising
demand ride. ‘Jockey’ is the only innerwear brand in India to be awarded the
‘Superbrand’ status and is certified by the US‐based World Wide Responsible
Apparel Production (WRAP).

Page Industries Walking on a Tight Rope:: Emkay

n Jockey’s growth story remains intact. Richer product mix,
product launches and capacity ramp ups to drive 19%
earnings CAGR over FY12-30E
n However, mix improvement from men’s innerwear to
women’s & sportswear to increase working capital days by
48% over FY12-30E, while asset turns to be capped at 7x
n At crossroads - Free cash flow insufficient to maintain
average payout of 55-60%. Page may have to increase debt
to retain dividend payout ‘OR’ reduce payout ratio
n De-rating inevitable- Only timing depends on company action
(payout reduction or maintenance). To pare Page’s premium
valuations despite strong growth. Initiate with a Sell

Technical QUERY CORNER -Opto Circuits, MCX, Rashtriya Chemicals, HDFC, Glenmark, Page Industries ::Business Line

I am a long-term investor, holding shares of Opto Circuits at Rs 250 and Multi Commodity Exchange of India (MCX) at Rs 1,280. Kindly advise the prospects and future growth of these shares.

V.Rajaiah

Opto Circuits India (Rs 154.4): The stock peaked out around your buy price at Rs 252 in September 2010. Since then, it has been on a long-term downtrend. In February 2012, the stock encountered resistance around Rs 220 and continued its long-term downtrend.

Medium-term trend is down for the stock since this February. As long as the stock trades above the key long-term support band between Rs 140 and Rs 150, long-term investors can hold the stock with stop at Rs 140. A fall below this band will reinforce the bearish momentum and pull the stock down to Rs 120 and then to Rs 100 in the forthcoming months.

An upward reversal from the aforesaid support range will lift the stock higher to Rs 175 levels and then to Rs 190. Only a strong rally above the Rs 210 and Rs 220 zone will alter the stock's downtrend and take it higher to Rs 260 in the long-term.

HOLD Page Industries Ltd (Page), ::Fullerton

Buy Page Industries; Target : Rs 3106 : ICICI Securities, PDF link

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http://content.icicidirect.com/mailimages/ICICIdirect_IndianInnerwearSector_InitiatingCoverage.pdf


R i d i n g   t h e   c o n s u m p t i o n   b o o m …
Page Industries (Page), a dominant player in Indian branded innerwear
and leisurewear segment, is expected to be the key beneficiary of the
changing preference of the Indian consumer towards branded apparel
owing to favourable demographics like rising disposable income,
increased urbanisation and enhanced organised retail penetration.
Strong brand recall for its flagship brand ‘Jockey’ owing to its early
mover advantage provides it a competitive edge compared to other
international peers. With the Indian innerwear segment expected to
grow at a faster pace (CAGR of 13.2% over 2011-2020E) than the Indian
apparel industry (CAGR of 10.6% over 2011-2020E), Page appears well
poised to capitalise on the opportunity enabling consistent growth in
revenues and profitability.

Page Industries: Buy ::Business Line,

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In the clutter of local players crowding the largely unorganised innerwear market, Page Industries' Jockey commands strong national brand recall. The non-discretionary nature of its products shields it from consumers cutting back on spending. Apparel retailers have had a tough couple of quarters due to shrinking disposable incomes and rise in apparel prices.

Page Industries, though, has been able to pass on cost increases. Its vast retail reach and its expansion into other product lines have also helped. With inflation beginning to slow down, consumer demand may pick up as disposable incomes rise.

At Rs 2,473, the stock trades at 32 times the trailing 12 month earnings, at a discount to the closest comparable, Lovable Lingerie. Investors with a medium-term perspective can buy the Page stock.

52-WEEK BLOCKBUSTER: PAGE INDUSTRIES:: Business Line

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In a budding branded innerwear market, Page Industries has a firm grounding with its Jockey range for men and women. This, together with the non-discretionary nature of products and a diversification into new segments, has put Page Industries on a high-growth path. The company's stock has been on a steady uptick in response to the consistently strong revenue and earnings growth.

Page Industries extended its brand strength into categories such as sportswear and leisure wear. Helping propel sales was its vast retail reach. It has 70 exclusive brand outlets and over 20,000 other lingerie shops which sell its products.

Cotton (the primary raw material) prices surging rapidly in late 2010 through early 2011, and excise duty on branded apparel, added to the cost. But the consequent price hikes Page Industries undertook didn't appear to dent demand in the longer term with consumers adjusting to the higher prices.

Revenues grew 45 per cent in the first half of this fiscal while net profits expanded 76 per cent. Operating margins shot up to 24 per cent for this period from the 21 per cent in the comparable year-ago period.

Net margins improved to 15 per cent from the 12 per cent in the year-ago period. There is also strong potential to ramp up revenues from Page Industries' becoming the exclusive licensee of international swimwear brand Speedo.

Page Industries - The right fit; visit note;:: Edelweiss

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Page Industries (PAG IN, INR 2,496, Not Rated)

We recently interacted with the management of Page industries (Page), one of the leading manufacturers of men’s and women’s innerwear in India. With focus on branding, the company has been able to garner 21% market share in men’s innerwear and 12% in women’s wear with a strong nationwide distribution network. It has a strong balance sheet, steady return ratios (52.2% ROAE and 41.2% ROCE in FY11), strong dividend payout, besides robust free cash flows.

Strong brand positioning with healthy market share

Globally, Jockey is positioned as a premium brand and in India Page has been successful in positioning it as an aspirational brand by maintaining high quality standards and through brand building exercise. Page is a leading brand with 21% market share in men’s and 12% market share in women’s innerwear. The company has an integrated manufacturing process, ranging from yarn knitting to finished products, with an installed capacity of 87mn units, likely to expand to 136mn units over the next two years. In July 2010, the company renewed its licencing agreement with Jockey USA, which makes Page the exclusive licencee to manufacture and distribute JOCKEY® brand of products until December 31, 2030, with UAE being added to the list.

Strong distribution gives edge over competition

Page has a well-channeled distribution network of over 400 distributors and around 20,000 retail outlets spread across 1,100 cities of India. The company is increasing focus on tier 2 and 3 cities as these are at an an early stage of evolution towards branded market. It sells products directly to large format stores like Shoppers Stop etc., and balance sales are done via distributors. The company pays around 11% margin to distributors and around 25-30% margin to retailers, thereby creating significant entry barriers for competition.

Outlook: Positive

With strong brand positioning and distribution network, we believe Page is poised for growth over the next few years. We do not have a recommendation on the stock.

Page Industries: Hold:: Business Line

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A unique presence has come in handy for Page Industries, whose stock has climbed 60 per cent since the start of this year even as most other retail and textile stocks faltered. The company primarily operates in the mid-to-premium innerwear market which has little competition in the listed space. Expansion in product lines, an ability to pass on cost increases, a wide distribution network and a strong brand presence helped sustain positive sentiments.

Still, the stock's impressive run has left it at high valuations. At Rs 2,506, it trades at 35 times the trailing 12-month earnings, a premium to most textile stocks and on a par with larger and more diversified retail stocks.

The Indian consumer has borne the brunt of high fuel and food bills for a long time now and has begun to scale back spending. The mid-to-premium of Page's products may deter purchases, especially by the vast middle income segment.

The company is further not invulnerable to fluctuating input costs, given negligible margin improvements over the past three quarters. The stock also suffers from a relatively lower float. Investors can retain their holdings, but refrain from fresh buying at current levels.

WIDE PRESENCE

Page markets its products through a combination of exclusive Jockey stores and other lingerie retailers. Exclusive brand outlets currently number 70 while the company distributes products through more than 20,000 retail outlets. This presence across the country helps it target a wide consumer base.

Page's flagship brand, Jockey, has a strong standing in the high-quality category, with quality-conscious consumers willing to fork out more. Extending this brand into related garment categories has proved successful for Page, which has introduced categories, apart from men and women's innerwear over the past couple of years.

For instance, it added sportswear and other leisure wear such as stretch pants and shorts for men and women. Such a diversification helps address a wider market and increase its share in the customer's wallet.

In July this year, Page became the exclusive licencee of global swimwear major, Speedo. Page will begin rolling out swimwear from the March '12 quarter onwards. Significant revenue contribution from this line is likely to kick in from the next financial year.

SUSTAINED GROWTH

Revenues have grown at a compounded annual rate of 37 per cent over the past three years. Net profits have similarly grown 35 per cent. Cotton, the primary input, had seen prices spiralling last year. Excise duties on branded apparel also took a toll on costs. Page accordingly took price hikes, but faced dented demand.

The March '11 quarter saw revenues and net profits grow at their most sedate pace of 35 and 29 per cent respectively against the 40-plus growth rates of the earlier quarters. Operating margins in the quarter too dipped two percentage points to 15 per cent compared to the same quarter the year before.

However, cotton prices have cooled off over the past few months. Demand has also adjusted to higher prices, and growth picked up by the September '11 quarter.

Revenues grew 43 per cent while net profits jumped 55 per cent. Operating margins however showed no improvement, staying at 20 per cent. A lower materials bill in the quarter was compensated by a hike in other expenses as the company stepped up promotional campaigns. Given its new product line in Speedo swimwear, advertising outgo may sustain at higher levels.

Page has also brought down its debt in the September '11 quarter. Debt-to-equity now stands at 0.44 against 0.93 at end-March '11. Interest costs and debt, therefore, do not pose a risk to earnings. The company is also well-placed to fund expansion.

CONSUMPTION SLOWDOWN

Even strong brands and a diversified presence cannot beat an overall consumption slowdown. Inflation has eaten into disposable incomes with consumers already cutting down on discretionary spends.

Page's products are present in the mid-to-premium price range while being more or less non-discretionary in nature. Even so, the middle-income segment's shrinking disposable income could result in down-trading into less pricey products.

Given the fragmented innerwear market, there is plenty of competition in lower-priced products.

UBS :: Page Industries - Strong 1Q

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UBS Investment Research
Page Industries
S trong 1Q
􀂄 1Q’12 PAT beat estimates on stronger growth and higher one-off margins
PAGE reported 1QFY12 PAT of Rs277mn (+115% QoQ, +102% YoY), sharply
ahead of UBS and street expectations. This was led by strong revenue growth of
47% YoY (backed by 18% volume growth and higher realisations) and higher
EBITDA margins at 24.8% (up 620bps YoY). The improvement in margins was
led by lower advertising spend, lower cotton prices and operating leverage. The
company debt declined to Rs600mn in 1Q from Rs1.15bn in FY11 (was high
earlier due to higher stocking of cotton at lower prices and reduced billing).
􀂄 Management positive on FY12 outlook
The management expects volume growth to pick up from 2Q onwards and guided
towards overall volume growth of 20-25% and operating margin estimate of 21.5%
for FY12. The operating margin of 24.8% in this quarter will come down to its
normal levels of 20-21% in next quarter as the advertising spend is back to trend
and product realisations catch up with lower cotton prices. The management plans
to pass on the benefits of lower cotton prices to consumers in the form of value
packs and will not do any price cuts, to maintain brand positioning.
􀂄 Beneficiary of rising consumer demand
We believe that PAGE remains well placed to benefit from the rising demand in
the domestic innerwear market with its strong brand and wide distribution network.
􀂄 Valuation: Rating and PT under review
We will revisit our estimates and PT post detailed call with the management. We
derive our price target on a PE based methodology

Page Industries: Buy; PT Rs2200 :: UBS India Mid-Cap Premier League - Season 1

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Page Industries: Buy; PT Rs2200
􀁑 The company plans to increase annual capacity from 87mn in FY12 to
110mn in FY13 and 140mn in FY14. Existing physical infrastructure can
support this expansion and only additional equipment and labor is required.
􀁑 Management expects sales volumes to grow at 25% for FY12 and revenues
at 35%. Only 10% of target market penetrated so long-term outlook remains
positive
􀁑 Leisurewear continues to be the fastest growing segment. The company
earlier estimated 1% drop in EBITDA margins for FY12 given the rising
cotton prices but with the cotton prices softening now again, it might be able
to maintain its previous year margins, as per the management

No demand slowdown seen despite 30% increase in prices last year.
􀁑 Page takes care of wage inflation (around 15%) through price increases.
􀁑 The company expects to begin sales in U.A.E market by middle or end of
this year.

Page Industries – 3QFY2011 Result Update -Angel Broking

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Page Industries – 3QFY2011 Result Update

Angel Broking recommends a Neutral on Page Industries.

For 3QFY2011, Page Industries reported a stellar set of numbers, above our
expectations. The company posted strong revenue growth, led by volume growth
and higher price realisation. OPM also came in above our estimates, which we
believe is not sustainable going ahead due to increasing raw-material prices.
Strong top-line growth: During the quarter, Page Industries’ top line grew
impressively by 49% yoy and 6% qoq to `134cr, while EBITDA grew by 81% yoy
and 7% qoq to `28cr. Operating margin came in at 20.7% thereby expanding by
360bp yoy and 20bp qoq.

Page Industries -Riding on Indian consumption wave… ICICI Securities

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Page Industries Ltd: research report by ICICI Securities


Riding on Indian consumption wave… 
We met the management of Page Industries (Page) to understand the
company’s business model and get a sense about the company’s future
plans. Page, the sole licensee of Jockey International Inc (US),
manufactures and markets the Jockey brand of innerwear and
leisurewear for men and women in India, Bangladesh, Sri Lanka, Nepal,
Maldives and the UAE. The company has a licensing agreement with
Jockey till December 2030. Page has a widespread distribution network
of over 16,000 retail outlets in 1,100 cities and towns.

Page Industries – 2QFY2011 Result Update Angel Broking

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Page Industries – 2QFY2011 Result Update

Angel Broking recommends a Neutral on Page Industries.

For 2QFY2011, Page Industries posted a robust set of numbers, above our

expectations. The company posted strong revenue growth, led by volume growth

and higher price realisation. Operating margins also came in above our

estimates, which we believe are not sustainable going ahead due to increasing

raw-material prices.

Angel Broking on Page Industries: Jockeying for growth-Buy

Page Industries: Jockeying for growth
Page Industries is the exclusive licensee of Jockey International,
Inc. (USA). The company manufactures and distributes the
JOCKEY® brand of innerwear and leisurewear for men and
women in India, Sri Lanka, Bangladesh and Nepal. Considering
the company's dominant presence in a fast-growing market,
strong brand recall and consistent financial performance, we
believe Page Industries is an ideal contender to get re-rated.
Exclusive licensee for JOCKEY® through 2030: Page Industries
has entered into a new licensing agreement with
Jockey International, which makes Page Industries the exclusive
licensee to manufacture and distribute the JOCKEY® brand of
products up to the end of CY2030. Under this agreement,
United Arab Emirates (UAE) will be added to the list of existing
markets served by Page Industries. In essence, this agreement
of exclusivity for 20 years, of a well renowned global brand,
lends good growth visibility.
Huge market size, with a fast-growing premium segment: We
estimate the potential national innerwear and leisurewear
market size at Rs15,600cr. In India, JOCKEY® is positioned as
a premium innerwear and leisurewear brand, catering to the
premium and super premium segments. We estimate the current
market potential of these segments at Rs3,740cr.
Strong brand recall + Wide distribution network: JOCKEY® is
one of the most trusted and well-respected innerwear brands
in India. The company's advertising and branding budget is a
good ~6% of its net revenue. Page Industries commands a
wide, pan-India distribution network, encompassing 16,000
retail outlets in 1,100 cities and towns.
Financial performance
During FY2010, the innerwear segment contributed about 76%
to the company's net sales, the leisurewear segment added 21%
and the remaining 3% came in from sale of factory seconds.
We estimate the innerwear segment to witness a 32% CAGR,
the leisurewear segment to log in a 40% CAGR and the factory
seconds segment to witness a 35% CAGR over FY2010-12E.
All the segments put together, we estimate total net sales to
grow at a 34% CAGR over FY2010-12E. Due to rising yarn
prices, Page Industries may not be able to fully pass on the
prices, thus affecting the core operating EBITDA and PAT
Initiating Coverage
Research Analyst - Naitik Mody
margins. Also, considering the sound capex funding model with
a higher leveraging ratio aided by zero equity dilution and high
dividend payout ratio, we believe Page Industries will command
higher RoEs and RoCEs.
Outlook and valuation
Since its listing in FY2007, Page Industries has traded in the
one-year forward P/E band of 12x-20x. From FY2007 to
FY2010, the company has delivered a 32.5% earnings CAGR
and an average RoE of almost 40%.
Considering the company's predominant presence in a
fast-growing market, strong brand recall and consistent financial
performance, we believe Page Industries is an ideal contender
to get re-rated. Estimating the company's PAT to grow at a 28%
CAGR over FY2010-12E, we have assigned a P/E multiple of
24x FY2012E earnings.
For FY2011E and FY2012E, we have estimated an EPS of Rs44
and Rs58, respectively. Assigning a P/E multiple of 24x for
FY2012E earnings, we Initiate Coverage on Page Industries
with an Accumulate rating and a Target Price of Rs1,392.