Analysts attribute the company's poor performance during the quarter to slowdown in the economy and low footfalls in EBO’s (exclusive brand outlet). Jockey’s volume decline was across the categories. The volume pressure was mainly due to less number of footfalls across channels.
“Going ahead, analysts at Dolat Capital believe that slowdown in the economy would restrict the company’s performance in the near term. Nevertheless, new product launches in men, women and kid’s category and impetus to increase penetration especially in kid’s category would help the company to register double digit growth in H2FY20E”, the brokerage firm said in result update.
“Page has reported 2.4 per cent volume de-growth during the quarter. The volume slowdown in the innerwear industry is during July 2019 as well. Nevertheless, we believe that with aggressive expansion plans (to double the store count over next few years), increase in distribution reach and capacity additions would help enhance volume growth for Page. Further, ongoing efforts to launch new products in kid’s category would help accelerate overall volume performance,” it said.
“However, with return ratios and free cash flow (FCF) generation holding-up well, we expect the stock to recover to its long-term average earnings multiple of 50x eventually, though after some more correction from current levels. The stock should find takers at lower levels given the strong return ratios led by increased outsourcing, Page Industries’ dominant position and retail reach and the massive growth opportunity in its target market,” analysts at Systematix Shares and Stocks (India) said in result update.
Thus far in the calendar year 2019, Page Industries
has underperformed the market by falling 31 per cent, as compared to 4 per cent rise in the S&P BSE Sensex.