Motilal Oswal neutral on Page Industries, target price Rs 19,110

The management is targeting 20 per cent topline growth for FY20.

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“We believe the year under review was impacted by subdued consumption, trade liquidity issues and competition."
Motilal Oswal has a neutral rating on Page Industries with a price target of Rs 19,110.

INVESTMENT RATIONALE

FY19 turned out to be a tough year for PAG; performance was dragged by lower volume growth (+5.6 per cent) and muted growth of 3 per cent /5.8 per cent in its key segments of men’s/women’s innerwear. Sales, Ebitda and adjusted PAT for FY19 grew 11.8 per cent, 14.1 per cent and 13.5 per cent, respectively. “We believe the year under review was impacted by subdued consumption, trade liquidity issues and competition,” it said.


The management is targeting 20 per cent topline growth (led by 10 per cent volume growth) for FY20.

“But, we believe this target is difficult to achieve, particularly as trade liquidity concerns have persisted for the first few months in FY20. However, we believe the long-term growth prospects remain healthy. The Indian innerwear market is expected to grow at 10 per cent CAGR over 2017-27 while men’s and women’s innerwear is estimated to grow 6 per cent and 12 per cent. “Newer segments, mainly athleisure and kid’s innerwear, are expected to grow even faster,” it said.
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