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Why Page Industries Isn't Worried About Rising Prices Hurting Demand

The CFO of Page Industries said, "We aim to double our aspirational target of reaching a billion mark in four years or before."

<div class="paragraphs"><p>A file photo of a&nbsp;man walking out of a Jockey outlet in Mumbai. (Photo: Francis Mascarenhas/Reuters)</p></div>
A file photo of a man walking out of a Jockey outlet in Mumbai. (Photo: Francis Mascarenhas/Reuters)

Page Industries Ltd. is not worried about the impact of rising costs on its demand as it does not foresee saturation in the premium innerwear market in the “decades to come”.

The maker of Jockey-branded apparel has a 12% share in the premium category even though the company is eight to 10 times bigger than the nearest competitor, S Chandrashekar, chief financial officer at Page Industries, told BQ Prime’s Niraj Shah. That offers opportunity to grow as long as supply chains remain stable, he said.

"Raw material prices have been increasing throughout FY21 and FY22, but it is seeming to taper a bit in Q4 of last year and Q1 of the present [fiscal] year," Chandrashekar said. "We have delivered 24% Ebitda margins in Q4 and our target is 20% to 21% which we try to gain through price increase."

That's after factoring in the cost inflation, he said.

Page Industries, which also makes Speedo swimwear in India, does not push volumes into the market but instead focuses on "pull" demand or orders from the network of stores it supplies to. To grow, it expands reach.

As they venture into new geographies, they get new customers, Chandrashekar said. The company has increased the number of retail outlets it supplies to from 69,000 to 1,15,000 in two years through March 2022 even as the pandemic raged. That's an addition of about 45,000 stores in two years, and the company plans to add 15,000-20,000 in the ongoing fiscal.

Citing how the brand is perceived by buyers, Chandrashekar said Page Industries has expanded retail footprint across multi-brand, exclusive outlets, and large-format outlets.

The company's revenue rose 26% in the last two quarters against the estimate of 22-24%, Chandrashekar said. And it has grown at a record 37% and 29% by revenue and volumes, respectively, in FY22.

That gives Chandrashekar the confidence to meet the company’s target of achieving $1 billion in revenue in four years or earlier.

Watch full conversation here: