Ambit Capital Analysts have the Following Recommendation for Page Industries
Page Industries reported revenue growth of 15% YoY in 3QFY16, with volume up 10% YoY (2% below our expectation). Whilst gross margin expanded by 80bps YoY due to softer cotton prices (40bps higher than expected), EBITDA margin compressed by 180bps YoY with EBITDA growth of 5% YoY. This included Rs80mn of one-off provision for retrospective payment of bonus as per a recent regulatory announcement. Excluding this one-off, EBITDA grew by 15% YoY. As a result, Page reported PAT growth of 13% YoY (25% YoY excluding one-off vs our expectation of 22% YoY growth). The firm has re-launched its kidswear range for boys and has also completed implementation of phase 1 of its supply chain software upgrade in the quarter. We expect revenue/EPS CAGR of 25%/31% (FY15-18E) with RoCE of ~50% over FY15-18E. We reiterate BUY with a target price of Rs 15,186
