Page Industries to pay ₹60 per share dividend soon: Buy post Q3 results?

With a market valuation of ₹42,834.50 Cr, Page Industries Ltd. is a large-cap business that operates in the consumer discretionary industry. JOCKEY International Inc. (USA) brand is manufactured and distributed in India, Sri Lanka, Bangladesh, Nepal, the United Arab Emirates, Oman, and Qatar by Page Industries Limited, headquartered in Bangalore, India.

Page Industries Dividend

The Board of Directors of Page Industries has declared 3rd Interim Dividend of Rs. 60/- per equity share for FY2022-23. “As informed earlier, the record date fixed for the payment of interim dividend is 17 February 2023. The date fixed for payment of dividend is on or before 7 March 2023,” said the company in a stock exchange filing. “For the current financial year 2022-23, the board of directors at their meeting held on August 11, 2022, November 10, 2022 and February 09, 2023 have declared 1st Interim dividend, 2nd Interim dividend and 3rd Interim dividend of ₹60, ₹70 and ₹60 per equity share respectively,” said Page Industries in a stock exchange filing.

Page Industries Q3 Earnings

On a standalone basis, the company reported revenue from operations of ₹1,223.26 crore in Q3FY23 compared to ₹1,189.80 crore in Q3FY22, representing a gain of 3% YoY. Page Industries recorded a net profit of Rs. 123.73 crore in the quarter ended December 2022 compared to Rs. 174.57 crore recorded in the quarter ended December 2021, representing a fall of 29% YoY. The company recorded an EBITDA of Rs. 192.8 Cr in Q3FY23 compared to ₹250.70 Cr in Q3FY22, representing a fall of 23% YoY. The EPS of Page Industries stood at Rs. 110.93 in Q3FY23 compared to ₹156.51 in the year-ago quarter.

Commenting on the results, Managing Director Mr. V.S. Ganesh said, “The growth momentum through the nine months is encouraging. We are confident of our long-term growth on the back of consumption, industry and economic drivers. We continue to focus on general trade distribution, expansion of EBOs, enhancing customer experience, further strengthening the product portfolio and keeping our supply chain robust.

Buy Page Industries?

“PAG’s medium-term earnings prospects have improved because of investments made in distribution, designs, and technology (which led to significantly lower inventory levels barring the temporary spike in 3QFY23). RoCE is also likely to be sustained at over 50%, having dipped to the late 30s in FY20 and FY21. However, the valuation at 48.3x FY25E EPS is expensive, leading us to reiterate our Neutral rating on the stock with a TP of INR35,400,” said Motilal Oswal.

“Q3 EBITDA/PAT were 20-25% lower than estimates, owing to weaker margins. Revenue grew 3%, led by volume/realization growth of -11%/15% and EBITDA margin declined 530bps (vs. expectations of 180bps decline). Margin weakness was attributed to realization of high-cost inventory, lower factory utilization on weak volumes and higher employee/brand investments. Volume decline was led by lower primary billings on ARS implementation and subdued demand for Athleisure/masks. Q4 is also likely to be weak, with spill-over of the ARS impact and sluggish demand environment. While competitive intensity remains high, PAG denied any market-share loss and emphasized on retaining its strong medium-term growth outlook. Focus remains on cost savings till revival of demand. We cut FY23/24E EPS by 3-5%, on need of higher brand investments. Focus on women/athleisure categories and distribution expansion should help PAG to deliver mid-teen earnings growth over the medium term. We maintain BUY with revised TP of Rs48,800 (on unchanged multiple of 58x FY25E EPS),” said the research analysts of Emkay Global in a note.

“Page’s Q3 FY23 revenue/EBITDA were 4%/21% below our estimates. It attributed the low revenue growth to poor consumer sentiment and ARS implementation, which hurt its primary sales. The EBITDA margin was hit by lower absorption of factory overheads, normalised media spends and high-cost stocks. Ahead, demand per management is still affected. Margins should improve now as its high-cost stocks are almost exhausted. In the past it maintained margins of 20-21% and will now control costs to ensure this continues. To bake in the slower demand, we reduce our FY23e-FY25e sales 2-3%. Our FY23e/FY24e/FY25e EPS are ~15%/14%/12% lower as we expect a slightly lower EBITDA margin. Key monitorables are growth and margins. Core-innerwear growth pace being maintained is a key positive. On the steep stock-price drop, we upgrade our rating to a Buy, with a TP of Rs45,938 (55x FY25e EPS of Rs835),” said the research analysts of Anand Rathi.

The shares of Page Industries closed today on the NSE at ₹38,510.00 apiece, up by 0.13% from the previous close of ₹38,458.25.

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