Will have to consider price hikes in FY23 as well: Page Industries CFO

'We have been adding almost 15,000-20,000 stores in any given year', said Chandrasekar K

Page Industries, the exclusive licensee of Jockey International for the manufacture, distribution, and marketing of the Jockey brand in India, Sri Lanka, Bangladesh, Nepal, and the UAE, reported a margin of 24 per cent in the January-march quarter despite inflation. Chandrasekar K, CFO at Page Industries, talks about increasing its retail footprint and the margin performance for FY23 in an interview with Sharleen D’Souza. Edited excerpts:

How is demand panning out? Is inflation impacting demand?

Demand has been good for us if you look at the past two years with the first quarter of both years largely affected by the Covid pandemic. We have still managed to deliver very good numbers and significantly crossed the pre-pandemic level. So, for us, demand has been good.

Do you plan to take further price hikes because of rising raw material prices?

Compared to competition, our price increases have been much lower. We did it only two times last year, whereas the cotton prices almost doubled over the past two years. So, we are facing inflation. Those (input costs) have sort of tempered down in Q4FY22 and even Q1, as we speak. But the price increase to maintain business volumes at a reasonable margin is inevitable for all the players. The only fallout of this is that Jockey has become more affordable. Some other players have had to take higher price increases. We are watching the situation on the cost front. We will have to consider price increases this year, as well. In FY22, we had two rounds of price increases of 5 per cent and 8 per cent.

Will athleisure continue to grow for you as a category?

The everyday wear athleisure segment is growing rapidly. It is not just growing online but offline, as well. According to the data that we have, in the premium athleisure segment, we have only penetrated about seven to eight per cent and this means that in a population of 100, there are still who is the target customer for Jockey and we are the only national player with that kind of size and volume. So the category is at a very nascent stage in terms of penetration among the younger crowd.

By how much do you plan to increase your total reach in FY23?

We have been adding almost 15,000-20,000 stores in any given year. In the past two years, we have added close to 45,000 stores, which is almost two-thirds the size we had. Growth in the retail footprint has been around 67 per cent compared with the end of March 2020. We will have this kind of addition and we are still largely underpenetrated in the premium segment. We are the largest volume player and we are only penetrated close to about 12 per cent in the premium apparel manufacturing. We can easily grow to five times this size in terms of retail footprint.

Do you expect margins to remain at current levels?

We always aim for 20-21 per cent Ebitda margins and on top of it, you may get to certain operational efficiencies. So, we have good optics controls. In many quarters, we deliver upwards of 24 per cent as we did in Q4. But largely if you look at Q4, the impact was on account of the price increase of about 8 per cent at the end of Q3. Going forward, we will try to maintain the margin at these levels. There is always a fine balance between chasing volumes and maintaining margins.