Shares of Page Industries , makers and distributors of innerwear-cum-leisurewear products under the ‘Jockey’ brand, slumped 13.46 per cent in intra-day deals on Monday, after the company reported weak numbers for the fourth quarter of FY19.

The stock touched a 52-week low of ₹19,011 but closed a tad better at ₹19,678.5, down 10.43 per cent, on the BSE.

The stock gave a return of about 63 times from the IPO price of ₹300. The company came out with an IPO in February 2007. The stock had registered its 52-week high of ₹36,335 on August 28, 2018. Since then, the fall seems to be vertical for the stock.

The company on Friday (after market hours) reported a 20.42 per cent fall in its FY19 March quarter profit at ₹74.98 crore against ₹94.22 crore in the corresponding quarter of FY18. Sales stood at ₹607.86 crore (₹608.4 crore).

“The reported negative growth in profit after tax (PAT) of Q4FY19 is on account of a one-time gain from sales schemes reversals and Goods and Services Tax (GST) transaction credits in Q4FY18, and higher sales schemes incurred in Q4FY19,” the company said in a BSE filing. Broking firm IIFL said Page Industries’ Q4 EBIDTA (down 18 per cent) and PAT (down 20 per cent) came sharply below estimates, as higher channel incentives resulted in weaker-than-expected flattish sales (+2 per cent adjusted for change in revenue recognition accounting).

IIFL cuts its FY20/21 EPS by 11/13 per cent, to factor in weak Q4 and demand weakness (1QTD has not seen any improvement). “Continued demand weakness (no signs that trough has been reached) and rising competitive pressures (non-issue, as per management) remain downside risks to our 15 per cent FY19-21 EPS CAGR,” it said, while maintaining its ‘reduce’ recommendation with a price target of ₹19,000.

Motilal Oswal Securities said achieving the management target 20 per cent topline growth is difficult, particularly as trade liquidity concerns persisted in the first two months of FY20. Page Industries remains a compelling investment case in the Indian consumer space with healthy long-term earnings growth prospects and healthy RoEs (50.8 per cent in FY19, considerably aided by sharp increase in dividend payout in FY19), Motilal said. But uncertainty prevails over the near-term numbers due to prevailing trade liquidity crunch, incomplete recovery of off-take after GST, and credible threat of competition for the first time in the form of Van Heusen, it added.

Maintaining ‘Neutral’ rating with a target price of ₹19,740, Motilal Oswal said that despite correction of about 40 per cent from its peak, the stock is expensive at 47.3x FY21 EPS.

Related Topics
comment COMMENT NOW