Target: ₹50,500

CMP: ₹44,599.25

Page Industries stock has corrected about 20 per cent from its October 2022 peak, likely led by expected moderation in growth in Q3 vs recent quarters. In our view, moderation is partly owing to inflation-led slowdown in consumption and partly due to a high base (pent-up demand and channel filling on impending GST hike last year).

Topline growth in Q4 should come back strongly with reversal of the high base, delayed winters and better supply-chain management. Beyond near-term challenges, business fundamentals are relatively in a much better shape, with investments in capacity/distribution expansion, product innovations and backward integration (in-house manufacturing for elastics and cups for women/premium innerwear).

Operational efficiencies should also improve, with better fill rates on new supply-chain solution (Bluet-Yonder) and ARS implementation. The same is also reflected in retention of the medium-term outlook by PAG, despite near-term headwinds.

Better asset sweating and stable cotton prices should drive gradual margin-/ROIC-gains. Single-digit market share in women/athleisure, best-in-class distribution and strong product-value proposition should help PAG to deliver a mid-teen EPS CAGR over FY25-35E, in our view.

We upgrade to Buy with Target price of ₹50,500 (58x FY25E EPS vs. 59x Dec-24 earlier). Multiple revision is led by 3M rollover.