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Geojit Financial
Page Industries (Buy)
Target: ₹24,605
CMP: ₹20,124.20
Page Industries Ltd. is engaged in the manufacturing, distribution and marketing of Innerwear, Athleisure, Sleepwear and Swimwear for men, women and kids. Robust revenue growth momentum with 17 per cent CAGR in top-line for the last 5 years. Innerwear market in India expected to grow at 12 per cent CAGR in the next decade to ₹74,300 crore from ₹29,000 crore at present. While Page's increasing penetration will provide strong potential to grow. Innerwear is evolving from being functional to a segment with a fashion quotient, also shifting from price sensitive category to a brand sensitive one.
Strong margin, debt free status and doubling of capacity by 2025 will help to tap vigorous opportunity in the sector. Higher asset turnover ratio, healthy dividend payout and better working capital management led to consistent improvement in ROE/ROCE.
We expect most of the negatives owing to pandemic are factored in, while discretionary spending is expected to pick-up from H2FY21. We initiate coverage on Page Industries with Buy rating and value at P/E of 60₹x on FY22.
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