Page Industries, Graphite India hit record highs on strong Q1 results

Shares of Page Industries and Graphite India have hit their respective record highs on the BSE, gaining 6% in intra-day trade on Thursday after reporting a strong set of numbers for the quarter ended June 2018 (Q1FY19).

Page Industries has surged 6% to Rs 32,142 after the company reported a better-than-expected 46% year-on-year (YoY) growth in net profit at Rs 1.24 billion in Q1FY19. Analysts on an average had expected profit of Rs 1.1 billion for the quarter.

The company which manufactures, markets, and distributes garments and clothing accessories under the Jockey brand name in India, had a profit of Rs 853 million in the same quarter year ago. Its operational revenue grew 17% at Rs 8,153 million on YoY basis. The board has declared first interim dividend of Rs 41 per share on an equity share.

In past two months, Page Industries rallied 32% after the company extended licence agreement with Jockey International till December 31, 2040. The S&P BSE Sensex was up 7% during the same period.

Graphite India too, hit a fresh high of Rs 1,109, up 5%, extending its Wednesday’s 5% gain on the BSE. The graphite electrode manufacture posted stellar set of numbers by positing consolidated net profit of Rs 9,557 million in Q1FY19 against Rs 300 million in Q1FY18.

Net sales jumped five-fold to Rs 19.65 billion from Rs 3.90 billion in previous year quarter, primarily driven by improved realizations. The Ebitda (earnings before interest, tax, depreciation and amortization) margin improved to 75% from 15% in year ago quarter.

“Strong demand for graphite electrodes from the EAF steelmaking route amid supply constraints has led to a sharp increase in graphite electrodes prices, thereby resulting in healthy profitability,” analysts at ICICI Securities said in result update.

Given the consistently healthy capacity utilisation levels of 100% in Q4FY18 and 98% in the current quarter, we upward revise our capacity utilisation levels for both standalone and consolidated operations. As the operating environment continues to remain favourable, we expect the topline, EBITDA and PAT to grow at a CAGR of 46%, 55% and 54%, respectively. We continue to value the stock at 10x FY20E EPS of Rs 140 and arrive at a target price of Rs 1,400, it added.