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Dolat Capital Report
Page Industries Ltd.’ Q3 FY23 results were below our estimates. Delayed winter, inventory rationalisation and general slowdown impacted sales growth during the quarter.
Page Industries reported 11% volume de-growth – registered three-year volume compound annual growth rate of 7%.
As most of the high cost inventory is cleared during the quarter, we believe that the margins would start improving here on. In addition, cold winter during Q4 is expected to augment thermal sales during the quarter.
Page Industries has reported sales drop in line with the other categories. We believe that the slowdown in innerwear category is temporary and being more necessary than discretionary, should revamp over two-three quarters.
We have significantly reduced our FY23E earning per share estimates to Rs 545 to factor in Q3 performance, sharp fall in margins and short term headwinds. However, we have broadly maintained our FY24/25E estimates as we believe that the company would improve performance with its strong brand and outpace the industry.
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