Comments
Chola Securities
Page Industries (Marketperformer)
CMP: ₹20,879.45
Target: ₹22,141
Key highlights: a) In 4QFY19, revenue fell by 0.1 per cent y-o-y to ₹610 crore, one of its slowest ever sales growth. Total volume grew 1 per cent y-o-y at 36.9 million piece, while blended realisation decreased 1 per cent y-o-y to ₹161/piece. Subdued consumer demand, de-stocking by retailers post GST and increasing competition impaired the company’s performance this quarter.
b) Gross margin expanded by 100 bps y-o-y to 63.6 per cent, while EBITDA margins declined 440 bps y-o-y to 19.7 per cent significantly due to negative operating leverage and higher sales incentives. EBITDA at ₹120 crore was down 20.5 per cent y-o-y. Other operating expenses inched up 110 bps y-o-y to 23.4 per cent and employee cost rose 430 bps y-o-y to 15.8 per cent. Other income increased by 20.1 per cent y-o-y to ₹8.71 crore.
c) PAT de-grew 20.4 per cent y-o-y to ₹750. PAT margin contacted 315 bps y-o-y to 12.3 per cent.
Valuation: We value the company at 41XFY21E to arrive at a target price of ₹22,141 and give it a Marketperformer rating.
Risks: a) Continued slowdown in consumer discretionary spends, losing market share due to heightened competition from both organised and unorganised segment; b) Adverse raw materials price movement.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.