Page Industries slips 4%, hits 52-week low on disappointing Q3 results

Ebitda margin contracted by 530 bps year-on-year, and 320 bps quarter-on-quarter to 15.8 per cent, primarily due to lower absorption, advertising and manpower costs

Shares of Page Industries, the country's largest innerwear maker, hit a 52-week low of Rs 37,650.75, down 4 per cent on the BSE in Thursday’s intra-day trade, after the company reported a disappointing set of results for the quarter ended December 2022 (Q3FY23).

The company's earnings before interest, depreciation, tax and amortization (Ebitda) margin contracted by 530 bps year-on-year (YoY) and 320 bps quarter-on-quarter (QoQ) to 15.8 per cent, primarily due to lower absorption, advertising and manpower costs. However, the management is confident of the company's long-term growth on the back of consumption, industry and economic drivers.

The stock of the garments and apparels maker has fallen below its previous low of Rs 37,806.60, touched on June 22, 2022. In the past three months, it underperformed the market by falling nearly 25 per cent, as against 0.33 per cent decline in the S&P BSE Sensex.

Page Industries is the exclusive licensee of JOCKEY International Inc. (USA) for manufacture, distribution and marketing of the JOCKEY brand in India, Sri Lanka, Bangladesh, Nepal, Oman, Qatar, Maldives, Bhutan, and UAE. Page Industries is also the exclusive licensee of Speedo International for the manufacture, marketing and distribution of the Speedo brand in India.

In Q3FY23, Page Industries' revenue was up 3 per cent YoY, but down 3 per cent QoQ at Rs 1,223 crore. Profit after tax (PAT) declined 29 per cent YoY and 24 per cent QoQ to Rs 123.7 crore.

Higher than usual channel inventory levels in the industry could result in lower offtake from dealers, Further, the company is implementing the auto replenishment system (ARS) to improve inventory hygiene across the dealer distribution channels, which could subdue the volume growth in the near term, ICICI Securities had said in its result preview report.

The brokerage firm had anticipated Page will report YoY revenue growth of 8 per cent to Rs 1,283 crore in Q3FY23 mainly driven by realisation growth of 10 per cent YoY. "We anticipate Ebitda margins will decline 160 bps YoY in Q3FY23 to 19.5 per cent on account of negative operating leverage. On the PAT front, we expect Page to report 2 per cent YoY decline to Rs 171 crore," ICICI Securities had said.