Buy Page Industries, target price Rs 57,500 : Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Page Industries with a target price of Rs 57,500. The current market price of Page Industries is Rs 47,681.85 . Page Industries Ltd., incorporated in 1994, is a Large Cap company with a market cap of Rs 53609.20 crore, operating in the Apparels sector.

Page Industries' key products/revenue segments include Innerwear & Leisurewear, Scrap & Others, Other Operating Revenue and Duty Drawback for the year ending 31-Mar-2024.



Financials
For the quarter ended 30-09-2024, the company has reported a Standalone Total Income of Rs 1260.82 crore, down -2.29% from last quarter Total Income of Rs 1290.42 crore and up 11.89% from last year same quarter Total Income of Rs 1126.80 crore. The company has reported net profit after tax of Rs 195.26 crore in the latest quarter.

The company's top management includes Mr.Sunder Genomal, Mr.Arif Vazirally, Ms.Rukmani Menon, Mr.Vikram Shah, Mr.Sandeep Maini, Mr.G P Albal, Mr.Jignesh Bhate, Mr.Varun Berry, Mr.Rohan Genomal, Mr.Sanjeev Genomal, Mr.Christopher Carroll Smith, Mr.Ramesh Genomal, Mr.Shamir Genomal, Mr.V S Ganesh, Mr.Shahendar Genomal. Company has S R Batliboi & Associates LLP as its auditors. As on 30-09-2024, the company has a total of 1 crore shares outstanding.

Investment Rationale
Page Industries has had a robust track record of revenue and earnings growth over the past decade. For the period ended FY24, its sales/EBITDA/PAT posted a15%/13%/15% CAGR despite headwinds. Earnings growth was fueled by best-of-the-breed sales growth, with lower utilization of the margin lever. Moreover, it has delivered a RoE of over 40% in the last 10 years. The women's innerwear and athleisure segments still have several white spaces in their product portfolio. Motilal Oswal Financial Services expects Page Industries management to fill these portfolio gaps.

Digital and marketing efforts will be helpful to gain share for these segments. The company maintains a healthy dividend payout ratio. An excellent track record, strong earnings growth potential (~20% EPS CAGR over FY24-FY27E), and high ROEs of over 40% are a great combination and deserve high multiples. The brokerage reiterates its BUY rating on the stock with a target price of Rs 57,500, premised on 65x Mar?27E EPS (10-year and 5-year average P/E at 65x-70x).

Promoter/FII Holdings
Promoters held 44.29 per cent stake in the company as of 30-Sep-2024, while FIIs owned 20.84 per cent, DIIs 28.76 per cent.